Secured Loans

Comparing Secured Loan Deals

Comparing secured loans is going to be a big part of getting the best deal on your next credit product. Secured loans have the great benefit of delivering high rates of capital and low interest rates across long terms of repayment. Comparing secured loan products to unsecured debt reveals that, although unsecured loan products will come without the risk of collateral or losing property through missed payments, secured loans are equipped with strong terms and conditions which allow the borrower to repay their lender at a much less troublesome rate. Yet the market for asset backed lending is a large one and you will need some help comparing secured loans if you are planning to take them out.

This is where this article may be of help to you. Here we will go through the main advantages and disadvantages of secured loans and how to make sure the product you buy gives you the best of them. Comparing products will be a big part of this whole process and so you need to know the best way to use price comparing tools that are offered on-line. You will also need to know a bit about dealing with individual lenders when you meet them to arrange an agreement.

How They Work

Secured loans are asset backed lending products which means that the money you are forwarded by the lender has been backed by an item of your own property. This can be anything valuable but in most cases it will be either your home or a large, luxury vehicle - car, boat, etc. Comparing this from of lending to unsecured debt is often considered to deliver unfavourable results but that should not be the only consideration. While unsecured lending means less of a risk of losing property it also comes with far less favourable terms and conditions.

If you default on a secured loan the property is taken away from you as part of the agreement. Because this risk hangs over the arrangement, the lender will be much more likely to offer decent terms and conditions as they know you are fully committed to the repayment schedule. This means you will be likely to get smaller interest rates and longer repayment terms meaning the month to month budget for paying back asset backed loans will be far easier to deal with than unsecured debt. Comparing secured loans with unsecured does not always come back in unsecured debt's favour.

Getting a Quote

The quotes you get when comparing secured loans will vary depending on a number of things. One of the most important figures of all in this process is your own credit rating. Credit scores are based on your history of lending and repaying and cover your entire financial history. They are calculated by independent credit advisers who lenders employ to deliver scans on the history of a borrower's debt. The better your credit score the better the quotes you will be given when comparing secured loans and the worse it is the more limited your options will be.

The main thing to keep in mind if you are worried about credit is that there is no one single credit score for any borrower in the UK. Though they will all use similar methods, the rating delivered by one advisor to the next may differ greatly. This means that just because one lender gives you a bad quote on the basis of your credit when you are comparing secured loans does not mean the next one will do the same thing. In fact you may find another lender who will come to a totally different conclusion about you reliability as there are no hard and fast rules governing the industry.

Bad Credit

If you have universally bad credit you may find yourself faced with comparing a number of quotes on products with unfavourable conditions which border on the unaffordable. In this situation you will have to judge things carefully and consider things closely. Ask yourself the main question: do you definitely need to take this product out? If it is for a large scale purchase of some kind, consider other ways you can raise the money without committing to a difficult term of payments on a high risk loan. Though comparing secured loans will often deliver great results, if you find that it is simply putting you in an impossible position you should weight up the other options.

When you need credit secured loans are often the best option. Though they come with the added risk of putting an item of property on the line, they also have some good elements. This means comparing them with non-asset backed products, they often come out better. Comparing secured loans can be done on-line. Make sure you get the best deal when comparing secured loans.