Secured Loans

Personal Secured Loans

Personal secured loans are one of the most popular credit products in the UK today. Many of us in Britain feel, from time to time, that we need a credit product to help out with our finances. The reasons for taking one out are endless: perhaps you need help paying off a larger debt, are looking to do some home improvements, are looking to fund a large family event like a wedding or maybe just looking for some extra financial security. Whatever the motivation for taking this step the first decision you will have to make is what kind of loans you are interested in buying.

There are, literally, thousands of different credit related products on offer to customers in Britain today. Each has its own features, its own benefits, purposes and terms to consider. Whatever you decide the most important question of all when you go to pick what product you want is will you go for something secured or unsecured? This will have a huge bearing on the product you buy, the amount you get and the way you pay it back so make sure you understand the ramification of personal secured loans before you start browsing products.

Assets and Loans

Personal secured loans are loan products which are leant out by a financial institution with an asset belonging to the borrower as "security". As there is a valuable, tangible intrinsic thing now being risked by the customer, the lender is often a lot more forthcoming with their side of the deal. That's why personal secured loans will often deliver much higher capital sums and can sometimes come with lower interest rates as well. These personal assets backed products will often have a longer re-payment term than their unsecured equivalent, which can be a real advantage to those who wish to make the process as comfortable as possible.

Advantages and Disadvantages

When comparing personal secured loans with unsecured credit the advantages and disadvantages of each become pretty clear. As we have mention before a personal secured loan will probably fetch you a higher amount and a longer term. Also, if you are worried about a poor credit score it may be your only option. When dealing with low credit customers lenders will often want their investment secured by an asset of some kind to cover the risk of dealing with a personal customer who has had trouble repaying loans in the past.

Unsecured personal loans, on the other hand, have the distinct advantage of not putting your home, car or other important asset at risk. If you fail to pay back your personal secured loans the asset that backed it will be taken away. If you fail to repay your unsecured credit product you will be marked with bad credit but will probably not lose too much physical material. This, however, comes with a downside. An unsecured loan will usually not render nearly as much money as a secured loan, so it might simply not be sufficient for whatever purpose you had in mind.

The truth is that there is not a great availability for unsecured loans in the modern financial market place. If, however, you are looking for a small amount, which you are able to pay back very quickly, you should still be able to find something for you. For any larger financial plans, however, you will probably need to look at personal secured loans.

Careful Budgeting

Before you put your assets on the line and purchase a personal secured loan, make sure that you have a realistic, well thought out payment plan for honouring your debt. It is alarming to hear of the many people who take out loans like these without some prior thought as to how, when and with what they are going to repay them. This is going to result in two things: losing your asset and ruining your credit. Neither is a happy outcome for you or the lender, so make sure you go into the agreement with eyes wide open and a clear, concise plan.

Keep in mind too that should you run into debt related problems with multiple creditors, a personal secured debt will not be liable to be consolidated with your other debts in a debt management programme. So, if you are already struggling with debt and are planning to get personal secured loans to pay it off, be aware that if you slip further debt management will not be an option. Then again, if you honour your repayments you'll repair you credit and get your finances back on track, so the main message is plan well.

Personal secured loans can be great ways to raise a lot of capital quickly. They also come with their own set of hazards and risks. Make sure you are aware of these and plan well before buying.