Secured Loans that can be Obtained with Collaterals
When you are trying to look out for Secured Loans – you are actually looking out for loans which are approved after collateral is kept with the bank. A secured amount as loan is obtained when you keep something as collateral or guarantee for the repayment of the loan. If you do not pay the loan within the specified time, the lender takes hold of the security or collateral to sell it off for recovery of the amount. These loans are designed for people who do not have a good rating for getting credit or for those who are poor and cannot get loan in the normal proceedings. The loan with a security is also given at a lower rate of interest to those people who can keep collateral for the lender to recover the loan amount.
The common types of collaterals are real estate or the car if you have one. The collateral can be anything that is of equal value to the Secured Loans amount. The normal way is to keep on using the property or the car as part of your possession and mostly you do not give up your possession of the collateral. The period till you make your payments, you can go on living in your house or driving your car without any issues. The problem comes when you cannot make the regular repayments and need to hand over the car or the home.
You can sign some documents to hand over the right to your car or home to the lender. If you default in paying the loans, the lending agency takes possession of your property or the collateral. If it is a car, they call it repossession and if it is the real estate – they call it a foreclosure and the lending agency gets complete possession. They can sell it for getting back the loan amount. There are other collaterals that the lending agencies take for approving Secured Loans and some of these collaterals are jewelry, collectibles, coins and other type of vehicles. The jewelry or collectibles are used as collaterals that the lending agency takes in their possession till the complete loan is repaid back.
About the Author
The Author is a professional writer, presently writing for Keypoint
Tell others about
this page:
Comments? Questions? Email Here