Financial hardship is neither prejudiced against the young nor preferential to the elderly. Both young homeowners and U.S. senior citizens can experience financial hardship, and sometimes need a hand up to recover their stability. Thankfully, secured loans are available to help. Collateral required for a secured personal loan minimizes lender risks. Less risk often results in lower finance charges and better deals for borrowers.
Many differences exist between secured and unsecured loans. Before making commitments you regret it is important to research different loan types and interest rates available to you. Keep reading below to learn valuable information about secured loans and how to find the best secured loan rates on the market today.
When searching for a loan to help with financial hardship or a home renovation you need to first understand what options are available. It is common sense to compare prices and get the best deals possible when shopping for automobiles. The same logic is applied to shopping for mattresses or lawnmowers.
Borrowing money has long-term effects, which impact your life for several years to several decades. Learning about loan types and how to get the best annual percentage rates (APRs) possible is more than just a logical shopping process – it is an essential financial strategy with the power to improve your life significantly.
A secured personal loan involves funds loaned to a borrower from a private or corporate lending service. The borrowed funds are secured using collateral, which is attached to the loan. This type of loan is beneficial to both borrower and lender for several reasons. Lending money is literally a risky business.
Lenders are at risk of losing funds from the loan and borrowers are at risk of taking on overwhelming debt and ruining their credit scores. A secured loan lessens these risks by demanding collateral to back up the loan funds in case of a default.
Secured loan rates, also referred to as annual percentage rates (APRs) are often lower than APRs assessed to other loan types. APRs are either fixed or variable and each has its pros and cons. Fixed APRs guarantee you keep the same rate for the life of the loan, but if the market changes in your favor you can only take advantage of lower finance charges if you qualify for a loan refinance program.
Variables rates change with market fluctuations, which might benefit you if your loan term exists during favorable market periods.
The secured loan application process takes place online or in-person. Standard proof of income, credit score, citizenship status, identity and collateral are all necessary. Once approved for a secure loan your funding happens quickly, sometimes even happening on the same day you get approved.