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Secured Loans
What is a Secured Loan and what are the risks?
A Secured Loan is a loan secured on the homeowners property very much in the same way as a Mortgage is. A Mortgage on a property is known as the 1st Charge – a Secured
Loan therefore becomes the 2nd Charge. If a Secured Loan is never
paid then obviously the Homeowners home is at risk. With the Mortgage company
having the 1st charge they therefore reclaim their money first. A
Secured Loan Lender would then follow as they are the 2nd charge. It
is worth remembering that a Mortgage and Secured Loan Company would only ever
repossess a property as a last resort.
A Secured Loan is ideal for
Homeowners who are looking to raise finance by using their home as security.
Traditionally a Secured Loan can provide Homeowners with a lower APR than that
of an Unsecured Loan. Obviously a Loan Lenders APR varies depending on the
personal circumstances of the applicant. A Secured Loan can be used for a
variety of purposes. The most common Secured Loan purposes are for Home
Improvements and for Debt Consolidation.
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