Product Description
A secured loan is a loan where the borrower offers some form of asset as collateral for the borrowed money. The asset is secured against the loan, which means the borrower must make repayments on the loan until the loan has been paid off or they will forfeit their asset. In the case of a secured loan on a home the property is used as the collateral, which can be repossessed by the lender following non-payment of the loan.

Main Players
There are several companies to choose from however acceptance depends to a large extent on your credit history. Platinum Exclusive Loans and Black Horse Personal Finance will only lend to people with a good or fair credit history however Ocean Finance will consider lending regardless of how your history looks. Other providers to look at include Accepted and Norton Finance, especially if you do have a poor credit history.

Pros of Secured Loans

• Quicker approval process when a property is used as collateral.
• Lower interest rate than most unsecured loans.
• You can often borrow up to 90% of the property’s value.
• Secured loans are good for credit reporting and to establish that you are a low risk borrower.
• Less restrictions on the loans, i.e. more choices in type of loans.

Cons of Secured Loans

• You do risk losing the property if you fail to make the payments.
• There is the possibility of a lower loan amount depending on the type or value of the collateral.
• Not many 100% loans on the market.

Things to Consider When Choosing a Provider
The numerous banks and building societies have their own requirements regarding lending. You need to consider what the lender will require of you and ensure that you fit within their terms and conditions. Once you understand what the bank or building society will require you can start to narrow down your list of providers. Currently the economy, especially the banking industry is suffering from bad lending practices. Right now there are a limited number of banks or building societies that will give you 90% or more of the loan to value. Some banks and building societies are only awarding a loan of 75% of the collateral value. You need to know which providers will allow for the lesser down payment. The larger the down payment on the loan you need the more difficult it can be to obtain the funds.
The borrower you choose will also need to be able to supply the loan. Some lenders may work to try and get the loan, but be unable to actually award the loan due to their circumstances. You want to find a provider that is secure in the current economy. Lastly make sure the lender you choose can provide a comparable loan to other offers you might be able to get. In other words make sure you can afford the loan and that the interest is the best deal out there.

BUYability Summary
Secured loans are your best option when it comes to purchasing property or paying back large debts in the form of unsecured loans and credit cards. You can often get a loan large enough to pay off all other debts if you use your home as collateral but there is a big risk of loosing the property if you default on the payments. Secured loans should only be considered when all other options have been explored and if possible your home shouldn’t be the asset you use as collateral.