Secured Loans information
A secured loan is a loan in which an applicant uses collateral such as their home, car, or land to secure repayment of a loan. A secured loan often can result in lower interest rates or longer repayment terms.
Banks often will offer secured loans for mortgages, student loans, home improvements, or the purchase of a new car.
Secured loans are ideal for applicants who are unable to apply for unsecured loans or if they would like to apply for a large amount of money. Also, the monthly repayments may be smaller than those compared with unsecured loans. While these can both of these can both be beneficial to the borrower, he/she should still think carefully before signing the contract for a secured loan.
If the applicant is unable to repay a secured loan, then the bank can repossess the collateral. In the result of an applicant who was unable to follow the terms, he/she could lose their home, land, or car depending on what assets they used to secure the loan.
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There are a variety of types of secured loans. They are:
* Mortgage loans: the applicant uses a home as collateral
* Non-recourse loan: the applicant has no other types of claim against the borrower should he become unable to pay the loan. The only claim he has is the collateral.
* Foreclosure: when mortgaged property is sold to pay the debt owed to the lender
* Repossession: when the collateral such as a car or home is taken by the creditor when the borrower does not make his payments
Applicants may contact their local bank to apply for a secured loan or contact other outside sources such as other nearby banks or those that are listed online. A secured loan shouldn’t be taken lightly-if the applicant is unable to pay the loan, they could lose their property, home or car. If a financial hardship should occur, the applicant may ask the lender about possible loan modifications that can be made to the loan. It would not be in a family’s best interest if they were to lose their home or worse if it went into foreclosure.
There are a variety of online banks that offer secured loans. Some of them are listed below:
* Wells Fargo: offer fixed-term rate and let an applicant know the same day if they qualify.
* E-Loan: Applicants may borrow up to $30,000. Homeownership is not required. The interest rate and the loan amount will depend upon one’s credit score.
* Bank of America: applicants can borrow in amounts of $10,000 and up. Applicants may use CD’s or savings to secure a loan. Repayment terms can be made for up to five years.
While there are plenty of online banks available to offer secured loans, you can always contact your local bank as well. Be sure that you review your current monthly budget and are comfortable with using your home or a car to secure a loan. If you feel uncomfortable during any process of the loan application, then perhaps you should consider other options.
Another site about this topic:
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