In a secured loan, the house of the borrower needs to be
pledged as collateral. This is to reduce the risk faced by
the lender in case the borrower is unable to repay the
loan. Due to a lower risk factor, UK secured loans carry a
lower rate of interest. For borrowers with adverse credit
this is an easy way to get a loan because otherwise they
are denied credit due to low credit scores. Secured loans
are also known as home equity loans or homeowner loans.
A secured loan offers no security to the borrower. The term
'secured' refers to security provided to the lending
institution or bank. For the borrower there is enhanced
risk as he/she stands to lose his/her home if there is
default in the scheduled repayment. The lender can
repossess the house and sell it for satisfaction of his
debts.
This is one of the reasons why many people are apprehensive
of obtaining a UK secured loan. A borrower, especially one
saddled with an adverse credit history, should carefully
assess his credit needs and ability to repay while pursuing
a UK secured loan. It would be wise for a borrower to look
into alternative options of availing credit before opting
for a secured loan. If nothing else is feasible, then the
best way would be to be to shop around for a UK secured
loan with the lowest rate of interest and also arrange for
a payment protection plan.
It is usually possible to obtain a UK secured loan with
some type of a payment protection plan added to it. A
payment protection plan is in fact an insurance cover that
protects a borrower in case he is unable to honor his
payment obligations for the secured loan due an unforeseen
exigency. If the payment protection is taken at the time of
obtaining the secured loan then the amount of the insurance
premium is added to the monthly repayments against the UK
secured loan. This will ensure that the borrower is
protected against any missed repayments against the loan
due to some unexpected happening beyond his control like
sickness, accident, unemployment, disability, or leave of
absence to take care of an immediate family member. In case
of a borrower's untimely demise, the balance of his UK
secured loan is paid by the insurers sparing his loved ones
from the added burden of loan repayment.
If you are a UK secured loan borrower, it would be a wise
move for you to take payment protection insurance in order
to reduce the risk of losing your home pledged as
collateral. Life is full of uncertainties and it is not
possible to be sure if things will always remain in a state
of wellness. When times are tough, the peace and security
offered by your own home is of immense value. By paying a
little amount each month against payment protection
coverage you can protect one of your most valued assets and
be sure of enjoying the continued security offered by your
home.
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Graham Bradlington is the marketing manager for Quickly
Finance Limited, a company which specialise in Fast track
Secured Loans & Remortgage for homeowners. Quickly Finance
is 100% independent & can search the whole market for the
best deals. For more info: http://www.quicklyfinance.com
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