The Advantages of Secured Loans

Secured loans are the most popular way in the United Kingdom for people to raise the extra capital that they need, but there are also a few other ways of going about this process. The most widely used alternatives are undoubtedly unsecured loans and re-mortgaging, but why should every homeowner always look into secured homeowner loans before even considering the other two options mentioned?

Let’s look at unsecured loans first – loans that are taken out from a lender whereby there is no security for the lender to fall back on. This means that should the borrower default on the repayments, the lender is not able to get their money back through the equity that someone has in their home (unlike with secured loans). Now at first this might seem like a good thing – after all, why risk your house when taking out a loan? This extra risk forces the lenders to push their interest rates up hugely, therefore an unsecured loan is always more expensive than the relatively cheap secured loans. Cheap secured loans are easy to find; cheap unsecured loans certainly are not.

The other advantage of using secured homeowner loans over unsecured ones is that for people with bad credit, secured loans are often the only way to go. No lender will agree to lending money to someone with bad credit unless they have some way of getting their money back if the worst happens – something that they can do when the equity of the home is placed as a bargaining chip in the deal. Unsecured loans are not suitable for people with bad credit – even if various television adverts say that they will provide them, usually for around 150%+ APR.

Re-mortgaging a home is another way that people often look to get some money, but again this is often not as preferable as getting secured homeowner loans. There are two main reasons for this, with the first being that re-mortgaging a home can often takes a very long time – time that some people don’t have when they are trying to get their hands on some extra money quickly. There are a number of fast secured loans out there from reputable companies.

The other reason for opting for a secured loan instead of re-mortgaging is simply that of personal pride. If you have spent years and years paying off a home, do you really want to hand part of it back to the bank and begin the process all over again? Taking out fast secured loans will mean that you will still own 100% of the equity in your home (provided it has all been paid off, of course) and can therefore have the satisfaction of knowing that you never have to worry about mortgages again. The same goes for business properties – secured business loans are often a far better option than re-mortgaging the building that your business operates from.

Choice loans are in a privileged position of having access to all Secured Loans lenders in the market. If you need short term cash and either are a tenant or you don't wish to offer your house as security you could get an Unsecured Loan.