The general opinion of people about secured personal loans has undergone a sea change. They are no longer considered as evil as in the yesteryears. They have become as much a part and parcel of the present days individual as some of the essentials like food. In fact, it is secured personal loan which finances food and other needs in the absence of sufficient income. Earlier people would abstain from taking personal loans unless it was very urgent. Personal loans during those times were more often than not secured through collateral. There was always a fear of repossession of the asset. The fears were not completely baseless. There were quite a large number of instances of borrowers losing their assets to loan providers because of non payment of the secured personal loans. Lenders too have a changed their attitude towards borrowers. Lenders earlier felt that unless strict vigil be kept on borrowers, there are greater chances of defaults on the secured personal loan. However, there is not much truth in the allegations. Borrowers are obliged to repay any loan that they take. They know that they have no option other than to keep up with the payments. The payments have to be made, although may be delayed. It is the borrower who is most seriously disadvantaged. An increased payment has to be made in the form of penalty. The loan provider seizes the collateral and the borrowers credit in the financial market sees a fall. Lenders now try to go deep into the reasons behind the non payment, if any. For borrowers who are genuinely incapable of making payments at a particular point of time, the lenders are ready to make concessions in the form of payment holidays. And why the borrowers of secured personal loans shall not be treated thus. Having offered the loan provider a right on their home or any other asset, they have covered a large part of the risk associated with lending. Through secured personal loans, borrowers can get up to 75,000. The maximum the amount of secured personal loan goes is 100,000. The lower limit for the borrowers of secured personal loans starts from 5,000. The type of asset used for guaranteeing loan repayments will influence the amount of loan one qualifies for. The largest amount is lent against home. Loan providers mainly prefer home as collateral, because of the relative safety that homes promise. Secured personal loans leave the decision of utility to the borrower himself. The borrower need not state the use for which secured loan is needed. If the loan proceeds have been taken for debt consolidation, the borrower at his will can use the loan proceeds for buying car, home improvements, or for going on exotic holidays. Interest rate is where most borrowers find secured personal loans the best. Secured personal loans are the cheapest of all personal loans. The decreased risk and applicability to individuals rather than businesses keeps the interest rates low. Borrowers can find personal loans in the range of 6-25%, depending on several factors like value of the collateral offered, type of collateral, the credit status of borrowers etc. Did we mention credit status? Credit status of the borrower indeed has a role to play in secured personal loans, though not as important as in unsecured personal loans. Borrowers bad credit history owing to CCJs, IVAs, and bankruptcy are little important in secured personal loans. These borrowers too can draw a good deal in spite of their bad credit history. An important reason behind the popularity of secured personal loans has been the independence borrowers get in deciding the terms of the loan. The independence mustnt be misused however. Taking decisions without sufficient information is as much of a misuse of independance. One must not hesitate from talking to experts on any of the issues associated with secured personal loans. It is actually your asset that is on stake in the secured personal loan, and taking the correct decisions will only bring you nearer to retrieving the rights to the asset again. |
