Secured Loans vs. Unsecured Loans - Choosing Between the Two Diverse Ends
Often in our search for finance options, we are led into a crossroad where we have to make a choice between secured and unsecured loans. Both are equally alluring and put the borrower in a difficult spot. It is difficult to make up the mind regarding one particular finance option because each has their share of advantages and disadvantages. What makes it more difficult to decide upon the finance option is that both secured and unsecured loans have a conflicting set of features, and the disadvantages of one are countered by the other.
Secured loans vs. Unsecured loans
Secured loans are the most conventional method of financing large sums of money. Even in older times people used to take loans to use in agriculture or other such needs by keeping their lands as security. Unsecured loans, on the other hand are of a recent origin. Since secured loans required the borrower to keep his home as collateral, many people who were without homes or who did not prefer attaching homes to obligations were left without finance. This also hampered the lending business of the lenders because the group was sizable. Thus, unsecured loans were launched as an alternative to the secured loans.
Misconceptions on Secured loans
There are many a myths doing rounds that have led to a sagging popularity of secured loans. People believe that by offering home as collateral they will have to move home until they repay the amount lent. People only transfer the ownership rights and not the right to live in the home. The lender can lay claim to the home only when the borrower does not repay the loan in full.
This will particularly interest the homeowners who do not take secured loans to protect their homes. Another important point that these people need to keep in mind is that they cannot escape the lender even on taking an unsecured loan. Though these loans are offered without any backing, the lender finds ways through which to recover the amount remaining on the unsecured loans.
This will shift a major part of the clientele for unsecured loans that comprises of the homeowners. However, unsecured loans continue to be the lifeline for the tenants. This is in spite of the fact that unsecured loans are more costly than the secured loans. The rate of interest charged from the unsecured loan customers is higher because of the larger risk involved.
One often gets to hear about credit history in the financial circles. Credit history is a record of the conduct of an individual in terms of the credit behaviour. Any failure by an individual on any debts, loans, or mortgages is immediately recorded in the credit file. Though lenders prefer the borrower to have a good credit history, they do not attach a special importance to it if the borrower is offering collateral. Home can back the loan if the borrower refuses to. The backing however is absent in an unsecured loan. This is why lenders demand a good credit history when offering an unsecured loan. Lenders who accept to offer unsecured loans with bad credit try to compensate the risk with a still higher interest rate.
Terms differ with a secured loan
With a Secured loan, you can in fact enjoy more favourable terms than the unsecured loans. Apart from the low interest rate, there are many more features exclusively for the borrowers of secured loans. Some lenders allow the borrowers to extend the period of repayment of the secured loans as much as they desire. Typical repayment period extends between 5-30 years. Extending the term of repayment however, increases the interest that a borrower will have to pay. Borrowers can discuss with experts about the optimum term that will lessen the interest cost without increasing the burden on the monthly income.
Whatever be the option chosen, adequate consideration must be given to the conditions under which the option is to work. A particular finance option that did wonders to your friends finances, need not necessarily work in the same manner in your case. Instead of improving the situation, they sometimes back fire with serious consequences for the finances. Taking second opinion is always beneficial since it helps to test the validity of the advice offered by your lender.
Andrew baker has done his masters in finance from CPIT. He is engaged in providing free, professional, and independent advice to the residents of the UK.He works for the Secured loan web site uk finance world for any type of uk secured and unsecured loan please visit http://www.ukfinanceworld.co.uk
Energy Loans Are Available | Business The Missourian
7 Alternatives to Costly Payday Loans Yahoo Finance
Disaster loans: Closed Mississippi beaches hurt businesses Washington Times
Why this regional bank is dumping N.Y. multifamily loans American Banker
Bill would aid New York cabbies who can't make loan payments American Banker
Student Debtor Forgiven $220,000 in School Loans Voice of America
Bailout Up to $500 Million Proposed for Taxi Drivers Trapped in Loans The New York Times
Warren praises IRS move to expand tax relief for people with discharged student loans | TheHill - The Hill
Warren praises IRS move to expand tax relief for people with discharged student loans | TheHill The Hill
SBA Economic Injury Disaster loans available in 13 Counties following Disaster Declaration - nbc25news.com
SBA Economic Injury Disaster loans available in 13 Counties following Disaster Declaration nbc25news.com
Barely anyone is paying off their student loans New York Daily News
Pontiac-based United Shore could steal No. 1 ranking from Quicken Loans Detroit Free Press
This New Bill Could Be a Lifeline for Student Loan Borrowers The Motley Fool
NIU students share their experiences with student loans DeKalb Daily Chronicle
New Loan Limits Blow the Roof Off Mortgages Yahoo Finance
Don't Waste Your Money Grads in default after student loan company shuts down John Matarese - WCPO Cincinnati
Don't Waste Your Money Grads in default after student loan company shuts down John Matarese WCPO Cincinnati
What is an unsecured loan? Bankrate.com
Former Students of Defunct ITT Tech Receive $95.1 Million Loan Relief Wall Street Journal
'I have a chance now to have a life': Navy vet who won watershed student loan ruling tells his story - Yahoo Finance
'I have a chance now to have a life': Navy vet who won watershed student loan ruling tells his story Yahoo Finance
Student loan assistance attractive employer... Kent Reporter
This is the student loan problem that no one talks about: Graduate school debt - The Washington Post
This is the student loan problem that no one talks about: Graduate school debt The Washington Post
Palo Alto boosts affordable-housing project with $10.5 million loan Palo Alto Online
SBA 504 Real Estate Loan From TMC Financing Enables Locally-Owned Countertop and Flooring Company to Expand - Nevada Business Magazine
SBA 504 Real Estate Loan From TMC Financing Enables Locally-Owned Countertop and Flooring Company to Expand Nevada Business Magazine
Black-owned firms are twice as likely to be rejected for loans. Is this discrimination? - The Guardian
Black-owned firms are twice as likely to be rejected for loans. Is this discrimination? The Guardian
Banks Caught in Regulators’ Squabble Over Low-Income Loan Rules Wall Street Journal
Black Business Owners With 750+ Credit Scores Are Rejected For Loans Black Enterprise
Upending Bankruptcy ‘Myths,’ Judge Erases $220,000 Student Loan Debt Wall Street Journal
High Credit Scores Still Not Enough for Black Businesses to Secure Loans, Federal Reserve Data Shows - Atlanta Black Star
High Credit Scores Still Not Enough for Black Businesses to Secure Loans, Federal Reserve Data Shows Atlanta Black Star
Spending bill would let 529 savings go toward student loans Inside Higher Ed
My daughter co-signed her boyfriend’s student loan. He quickly stopped making payments — how can she free herself? - MarketWatch
My daughter co-signed her boyfriend’s student loan. He quickly stopped making payments — how can she free herself? MarketWatch
Banks Get Tough on Shale Loans as Fracking Forecasts Flop The Wall Street Journal
Loan income drives People's United's Q4 profits higher Hartford Business
Aurora looks at $200,000 loan to Morton restaurant Chicago Tribune
Arkansas farmer named in loan-fraud indictment Arkansas Democrat-Gazette
Cornerstone Bank Plans for Loan Center in Westborough Banker & Tradesman
Georgia bill would create loan forgiveness program for teachers who agree to certain requirements - 11Alive.com WXIA
Georgia bill would create loan forgiveness program for teachers who agree to certain requirements 11Alive.com WXIA
Bank OZK Q4 reflects loan, deposit growth Seeking Alpha
Legislators Are Trying to Block Devos' Rule on Student Loan Forgiveness—Here's What You Need to Know - Newsweek
Legislators Are Trying to Block Devos' Rule on Student Loan Forgiveness—Here's What You Need to Know Newsweek
Bloomberg rips Trump over 'very small' million-dollar loan from father Washington Examiner
Pitfalls of the 7-year auto loan WWBT NBC12 News
Military draft: Applying for FAFSA student loans doesn't mean you'll be drafted. Here's why. - CBS News
Military draft: Applying for FAFSA student loans doesn't mean you'll be drafted. Here's why. CBS News
Saddleback loan guarantee meeting postponed Lewiston Sun Journal
India's gold loan market to touch Rs 4,617 billion by 2022 Economic Times
Football: Ashley Young joins Inter on loan Anadolu Agency
Could a bill aimed at teacher student loan debt relief be a boost to young students as well? - WRDW-TV
Could a bill aimed at teacher student loan debt relief be a boost to young students as well? WRDW-TV
Tracking The Challenge Of Student Loan Debt In Wisconsin Wisconsin Public Radio News
Candidates for Utah’s governor cash checks, loan themselves money KSTU FOX 13 Salt Lake City
Consultancy Seawave investigating Lekoil loan scandal Financial Times
Brooklyn mall’s $487M tops outer-borough loan list The Real Deal
Loan wolves The Real Deal
What To Consider Before Applying For A Loan
Here are some useful tips on what to consider before applying for a loan. If you need money to pay bills or make home improvements, and think the answer is in refinancing, a second mortgage, or a home equity loan, consider your options carefully.
Business Loans: If You Know How To Make Good Use Of Money And Expertise
Are their rewards of being your own boss? Yes, in fact many - you make the rules, you work for yourself, you take home the profits and you get to do what you want. Business and finances are closely intertwined.
Finding the Bad Credit Personal Loans that You Need
It can seem impossible at times to get bad credit personal loans? every place that you go to apply for a loan turns you down without a second thought. You may feel frustrated, depressed, or overwhelmed? all because of credit mistakes that you've made in the past.
Car Loans After Bankruptcy - How Poor Credit or a Recent Bankruptcy Can Affect Your Loan Approval
If you have poor credit or a recent bankruptcy, you can still get approved for an auto loan through sub prime lenders. Sub prime lenders specialize in financing auto loans to people with adverse credit.
Information About Adverse Credit Homeowner Loans
While looking for adverse credit homeowner loans it can seem like you're fighting a losing battle. You might think that no lender will want to give you a loan because of your credit? but you'd be mistaken.
What is a Homeowner Loan?
A Homeowner Loan is a way of using the equity tied up in your property to raise money. Equity is the difference between the value of your home and your outstanding mortgage.
Personal Loans - To Make A Personalized Financial Agenda
The phrase 'tailor-made' ought to be made for personal loans. Personal loans have become relatively easy to acquire in UK.
8 Point Checklist: Evaluating Online Vendors
Money With The Click of a Mouse
Online payday loans seem to be popping up everywhere. A simple web search will positively crowd your screen with online payday loans sites hoping to get your business.
Understanding Secured Loans
A secured loan is any loan that is secured on your home or property. Secured loans are more easily accessible to those with a poor credit record.
A Guide to Finding an Adverse Credit Homeowner Loan
If you're searching for an adverse credit homeowner loan, you might not know where to turn. After all, it seems like no one wants to give you the time of day if you have less than perfect credit, much less give you a loan.
What Is A Payment Protection Plan?
A Payment Protection Plan is an insurance cover you would normally take out when you apply for a loan in order to have peace of mind because no matter how healthy you feel today, nobody knows what lies round the corner tomorrow. Nobody is immune from unemployment or illness, which is why Payment Protection Plans are offered as a means of protecting loan payments.
What Are VA Loans?
VA loans are basically mortgages or home loans geared towards ex-military servicemen and women. The VA loan programme was created in 1944, and was initially known as the Servicemen's Readjustment Act, to help returning servicemen settle down and purchase their first home.
No Credit Check Payday Cash Advance Loan - Benefits to Using a Payday Loan
No Credit Check Payday Cash Advance Loan - Benefits to Using a Payday Loan Online if You Have Bad Credit HistoryAn online payday loan can help you rebuild your credit if you have a bad credit history. With no credit checks, you can be approved for a cash advance to keep on track with your bill payments or survive a financial emergency without ruining your credit score.
A Guide to Common Loan Terms
Many people may wonder about common loan terms? words and phrases that are often tossed about when describing different types of loans that are assumed to be common knowledge.These common loan terms represent very important parts of the lending process, but to the person who isn't entirely sure what the terms mean they can be quite intimidating and cause the person to feel very uneasy about getting a loan.
Home Equity Loan Information - What Is A Home Equity Line Of Credit?
Did you know that if you have a home that you've been paying on for years, you may have a lot of usable money right under your nose? What's more, a home equity loan just may be the perfect way to get your hands on that money!Here's how it works. Let's imagine that your home mortgage is for $250,000, but after years of paying on that note, you only owe the mortgage company $100,000.
5% Down Vs. 10% Down - A Comparison
It has always been an issue for home buyers to save their down payment. Many people, on advice from various people wait to save 10%, rather than moving into the home sooner with 5% as a down payment This is not always a good idea.
Ways to Find a Cheap Loan
If you're in the process of trying to find a cheap loan, you might find it frustrating and wonder if you're ever going to find the loan that you want.If you haven't already, you might want to consider applying for a cheap loan online instead of using a traditional lender? online lenders can usually offer a competitive if not better loan, and may feature a variety of repayment options as well as a convenient application process and 24 hour inquiry and support availability.
What is a Secured Loan?
A secured loan is simply a loan that uses your home as security against the loan. Secured loans are suitable for when you are trying to raise a large amount; are having difficulty getting an unsecured loan; or, have a poor credit history.
Where to Get Your Military Signature Loan
Military signature loans are easy to come by. When looking for a military signature loan you might even get overwhelmed by what seems like an endless supply of lenders, APRs and added perks.
|home | site map|
|TIGER MEDIA© 2006|