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2007-12-13 02:26:32
Secured vs Unsecured Loans: The Advantages of Using Your Home as Collateral
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 One of the most asked questions that we receive here on this site is:
Why would I want to pledge the equity in my home as collateral if I can just take out an unsecured loan instead?
There are many advantages to taking out a secured loan compared to an unsecured loan. They are:
1. Lower interest rates. This is the biggest reason for taking out a secured loan. You would be looking at paying an annual interest rate of around 8.5% with a secured loan, compared to around 15% with an unsecured loan. This is a huge difference over the life of your loan.
2. Flexible repayment schedule. Secured loans offer you many perks when it comes to paying the loan off. Some companies will give you a six month window where you don't have to make any payments; some companies will allow you to skip a month or two if you are having a financial crisis. You just don't find this kind of flexibility with an unsecured loan.
3. Borrowing amounts. With a secured loan, you can borrow large sums of money, all the way up to 100k pounds depending on how much equity that you have in your home. With an unsecured loan, your available capital will be much smaller, because the lender won't have any collateral. You think that an unsecured lender will lend someone 40k pounds to finance home renovations with no collateral?
Pledging the equity in your home as collateral sounds scary, but if you keep up with your payments, there is nothing to worry about. If you are worried about getting sick or injured and being unable to work, then there is Payment Protection Insurance that will alleviate these worries.
Secured loans are definitely the way to go if you own a home in the UK.
Apply for a Lending Place secured loan today!
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Get Your Free Loan Offer Today - Click Here
There is NO FEE and you are under NO OBLIGATION!
We'll Compare over 250 loan plans and search over 90% of the loan market.
Applicants with bad credit history, Mortgage Arrears, Missed payments or CCJs are welcome.
A lot of big banks are competing for your business - Apply Today
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