Homeowners often have the need to borrow for a number of reasons, and many know the words secured loans and they have friends who have arranged these loans. One friend took one out to buy a car , and another secured loan was used by a friend to pay for a cruise . Although you know people who have taken out secured loans, many are uncertain what a secured loan actually means.

These loans are called secured loans because, as it states on the box, they need collateral on which to be secured, and on this occasion it is the property of the borrower,

Secured loans are secured against the equity on a property, and 100% and 125% loan to values no longer exist..

As loan to values are now limited, the best LTV for employed borrowers is now only 85%, and for the self employed it is 75%.

There is one secured loan lender granting secured loans to the self employed with no accounts at a LTV of 60%, at the most and the applicant needs three months bank statements

The interest rates for secured loans these days is around 9%, which, as this is considerably cheaper than the rate of interest for credit cards and most personal loans, makes them very good debt consolidation loans.

They can be repaid from five years to twenty five years, which enables homeowners to buy items with secured loans that otherwise thay could not possibly afford..

They can also be paid off early, and the early settlement penalty is normally only month’s interest.

Yet another homeowner loan, very similar to secured loans, is a remortgage which can be used for the same things as secured loans.

One time when a homeowner would be better with a secured loan than a remortgage is when he is in a mortgage deal with a tie in period, when the homeowner would have an early repayment penalty.

The penalty can cost a lot as the penalty generally can be as high as 5% of the balance on the mortgage, and this would make it stupid to remortgage.

Want to find out more about secured loans, then visit Champion Finance’s site on how to choose the best debt advice for your needs.


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