Basic Things to Know About Personal Secured Loans

Anyone can find himself in a situation when he is not able to manage his monthly expenses, and therefore, needs to quickly find a way to deal with these financial problems. It’s not a secret that keeping your credit card balance under control or paying back mortgage installments is not an easy task. That is where applying for a personal loan may turn out to be a convenient option to meet your financial needs, until you are able to regain control of your living expenses.

As practice shows, personal loans are a convenient way to pass through the economic crisis, provided that you use them wisely. There are secured and unsecured personal loans. Applying for a secured loan is a quick and reliable way to get the necessary financing where a guarantor or collateral is indispensable. A secured personal loan implies possibility to negotiate lower interest rates, along with a longer repayment period.

When applying for an unsecured personal loan, you will generally have to pay higher interest rates, and may also be subject to your credit score verification before you get the requested money. In order to get eligible for this kind of services, it is important for you to be legally employed at the same job for about 6 months. You may be asked to provide your salary stubs when applying for an unsecured personal loan, in order to justify your income level and residential address. The amount of money available for you will depend on your monthly earnings.

As it has been mentioned above, secured loans are typically secured through your assets, like car, PC home and other property. In this case, the money given to you is secured against the monetary value of your pledged property. If, for example, you need a substantial personal financing in order to renovate your home, secured personal loans would be ideal for such large borrowings. These loans can also be a good solution for the home owners whose unsecured loan requests were rejected.

The main benefit of secured personal financing is that it comprises much lower interest rates, as opposed to the unsecured loans. This rate can further be negotiated for even lower monthly payments. The total amount of loan usually varies from one lender to another, though it is generally calculated based on the value of your property. With secured loans, you will discover that lenders are rather patient with you in case you fail to make payments on time. That is because your pledged assets give lenders the confidence that their money is fully secured.

It is also very important to pay attention to the APR (annual percentage rate) when applying for a personal loan. Remember, when you provide collateral for your loan, you have the right to get as many benefits from it as you can. Make sure that all the assets are mentioned in your loan agreement, and nothing remains just verbal.

About the author:

Monica White is a financial copywriter working for a website that provides online cash advance services.