Financial Resource

Simply, a secured loan is a loan which is backed by assets which belongs to the borrower in order to shrink the rate of risk assessed by the lender. Here, you need to understand that assets produced as a security to the loan amount can vary case to case. In some cases, borrowers’ home which is up for some kind of renovation or extension can be put as collateral to avail the loan so that these tasks can be completed.

This is, generally, termed as secured homeowner loan. However, it is not necessary every time that borrower has to use the loan amount on the improvement of property itself if he/she has taken the loan by putting it as collateral. Borrower is absolutely free to use the loan amount according to his/her prerogative and no lender will ask any question about the usage of loan amount. But in the case of credit default the same property used by borrower as a security will be forfeited by the lender and he/she can do whatever they want with that in order to reclaim their money.

There are other examples of secured loans such as car logbook loans as you need to put your car logbook, which includes all the important paper of your car, under the scrutiny of lender until you are not repaying the loan amount. And if you default, you will lose your car. Some other examples of best secured loans are loan against gold, which is availed by using your gold as a security against the loan amount and loan against your stocks, investments etc. Remember, the amount which can be borrowed under low rate secured loan category mainly depends on the market value of various assets which are being put as collateral.

It is always advisable to the borrower to bargain hard in order to avail the cheapest secured loan deal because as lender has got the assurance of your assets and hence, can be pushed for low rate secured loans with extended repayment tenure. Always visit financial portals in order to attain tailor made loan deal.

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