Secured loans are loans which you can borrow against an asset, such as your car or house. These loans help people to borrow a large amount of money which they would not have been able to without an asset. Also, it is less risky for lenders to give you secured loan. They would find you more reliable if you to a loan against the asset. Although if a borrower misses payments of their secured loan, the lender can seize their vehicle. Lenders usually choose this alternative if they don’t have any other means for getting back their money.
When Can You Use Secured Loans?
When borrowing a secured loan the lender won’t ask you the reason you are buying so much money. So, you can use secured loan for any purpose, the money is all your so spend it any way you like.
You can borrow secured loan for a family vacation, or any other trip. If you have a small business in mind you can get a secured loan. You can use it for your kid’s school fees or any summer camp that they want to attend. Most people use secured loans for buying a new car, or a motorbike, or to just pay off some other debts.
So you can decide what you want to do with your secured loan, just borrow what you can afford. Remember to make timely repayments and don’t miss any.
How Much Can I Borrow in Secured Loans?
The most important question that most of the people ask “How much can I borrow with secured loans?”
The amount that you can borrow from secured loans ranges from £2,000 to £500,000. Although, the exact amount you can borrow depends on certain factors. They take into consideration the value of the asset which you are keeping as a security, your income, if you can afford repaying in time and other few details. Lenders make use of the loan calculator to decide the loan amount, they see to it that you are given affordable interest rates and repayment amount which does not affect your monthly budget.
How Are Secured Loans Different than Unsecured Loans?
In secured loans, people with an asset like car or house only can apply for the loan. They get to borrow a huge amount at affordable interest rates, unlike unsecured loans. People make use of unsecured loans when their loan requirement is small and they don’t need a huge amount. Also, people with a good credit score who do not possess a risk are given unsecured loans. If you have a bad credit score then you can be given an unsecured loan but with higher interest rates than other forms of loans.
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