SECURED LOAN

This is a loan which is backed by assets belonging to the borrower in order to decrease the risk taken on by the lender. The asset in question with the majority of secured loans is a property on which a mortgage already exists. The assets may be forfeited to the lender if the borrower fails to make the necessary payments especially on a secured loan or second charge.

Secured lending should be considered when an individual is unable to consolidate using unsecured lending. These conditions arise especially when:

• The total debt is over £25,000
• When the borrowing is considered too high a risk for unsecured lending
• Or when the monthly repayments on unsecured debts are too expensive

Some of the benefits of a Secured loan are:

• It invariably gives a Lower affordable monthly payment.
• A Single payment is often easier to manage than multiple payments.
• Credit rating is not impaired, if there was a risk of defaulting on the various unsecured lending.

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