What are secured loans?
Secured loans are secured on your home and can be used for such things as improving your property and consolidating loans.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
- These loans are also called secured homeowner loans.
- With secured loans, if you default on the payment, you could be made to sell your home to clear your debt.
- When deciding whether or not to offer secured loans, lenders will look at the value of your home, as well as your personal credit history.
- According to the FSA, rates for secured loans tend to be lower than for unsecured loans, but there could be extra fees and of course your home could be at risk.
- People who do not have a good credit history, but do have value in their home may apply for a secured homeowner loan
- Why are they called secure? Loans are secured against the value in your property, so are secure in respect to the lender. There is no special 'secure feature' from your persepective.
- An alternative to taking a secured loan is to increase the mortgage on your property.