• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Boy Sets Fire

Lifestyle Blog

  • Home
  • About
  • Blog
  • Humor
  • Lifestyle
  • Money
  • Marketing
  • Business
  • Travel
  • Contact

7 Benefits of Secured Personal Loans

July 9, 2020 / by Andrew / Leave a Comment

A loan is helpful for home repair, healthcare expenses, car repairs, or unforeseen expenses. Loans come in handy when you don’t have enough cash to cover a specific purchase. It is important to note that not all loans are the same.

A secured personal loan is a type of loan that uses collateral as a promissory to repay the debt. The collateral from the borrower is used as loan security and protection.

How Do Secured Loans Work?

With a secured loan, the borrower uses assets as a promise to pay back the loan. A secured loan grants the lender rights to claim your assets as a form of payment if you default on the loan.

A secured personal loan can use collateral such as houses, paid-off vehicles, jewelry, and other expensive items.

A lender can place a lien on the assets used to secure the loan. After the loan is paid in full, the lien is released from the collateral. During the loan repayment term, the lender can use your lien to repay your loan if you default or miss a loan payment.

Secured Loans vs. Non-secured Loans

A secured loan is different from an unsecured loan. Collateral in the form of tangible assets protect a secured loan. An unsecured loan does not use collateral as protection. An unsecured loan is not protected, and therefore it can pose a higher risk for lenders.

7 Benefits of Secured Personal Loans

1. Higher Approval Rates

A secured personal loan has a higher chance of being approved as opposed to an unsecured loan.

Lenders like to see that their money is protected. The collateral used for a secured loan helps to increase the rate of loan approval.

2. Larger Loans

Typically, with secured personal loans, you are able to borrow more money. Using collateral reassures the lender that they will be repaid.

Lenders are more likely to give larger loan sums to people that can secure their loan. The reason for this is because the lender will get paid no matter what. Either through loan payments or collecting from collateral.

3. Lower Interest Rates

Interest rates are based on the amount of financial risk to a lender. This is why people with poor credit scores typically have higher interest rates.

A secured personal loan has higher credibility and protection. Therefore, the interest rates are lower compared to the rates of unsecured personal loans.

Secured loans have fewer risks and losses for the lending institution. As long as you have a decent credit history, stable income, and valuable collateral, you can expect a low-interest rate.

4. Better Loan Repayment Terms

Better loan repayment terms are another benefit of a secured personal loan. These loans are often accommodated with longer repayment terms.

The repayment term is dependent on the loan amount and interest rate.

5.Less Likely to Need a Co-signer

A co-signer is sometimes needed as an added protection measure for loan lenders. The co-signer is responsible for the loan repayment if the primary borrower defaults on the loan.

Finding a co-signer can be a hassle. Luckily, with a secured personal loan your collateral and assets are used as a loan protection plan. As a result, there is a better chance of you being approved for a secured personal loan without a cosigner.

6. Build Your Credit

Most lenders report to the major credit bureaus. Staying on schedule with loan payments can improve your credit score. Also, paying off the loan in full reduces the amount of debt on your credit report.

Not only will paying a loan on time help your credit, but it is also beneficial to future borrowing needs and requests from lending companies.

7. Motivation to Repay The Loan

Lastly, the final benefit of a secured loan is the motivation to repay the loan. The personal collateral used for the loan will have a lien until the loan is paid in full. Potentially, this can serve as motivation to repay the loan faster.

There are numerous benefits of secured personal loans. Consider RapidLoans personal loans as your lender for secured personal loans. They are trusted and well-known choices that can help you with your financial needs.

About the Author:

Ray is a sought after thought leader and an expert in financial and money management. He has been published and featured in over 50 leading sites and aims to contribute articles to help novice financial planners. One of his goals is to impart his knowledge in finance to educate and help ordinary people create and achieve their financial goals.

To read more on topics like this, check out the Money category

Filed Under: Money

Previous Post: « Product Liability: What to Do If You’ve Been Injured by a Faulty Product
Next Post: 10 Tips for Getting a Large Personal Injury Compensation »

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

About Us

Hey guys it’s Andrew! I am a writer, a blogger, and a curious human being full of ideas. I remember as a teenager going to my local store to grab a freshly published magazine about the ins and outs of the online business world. Read More…

Facebook

Boy Sets Fire

Lets Connect

  • Facebook
  • Instagram
  • Twitter

Newsletter

Planning the Ultimate Florida Vacation

Florida is the second most popular state to visit in the US. Millions of tourists, from around the US and around the world, come to Florida each year for its warm, tropical weather, beautiful beaches, and world-class theme parks. Are you looking to travel south for your vacation? Wondering how you can plan the ultimate […]

20 Facts About Real Estate Business In Australia

In Australia, the real estate business is booming. According to recent studies, the industry has been growing steadily for the past few years and is expected to continue doing so in the foreseeable future. There are a number of reasons for this growth, chief among them being the country’s strong economy and population growth. Here […]

15 Ways To Vet Your Future Tenants

When you are a property management professionals, vetting potential tenants for your rental property, there are many things to consider. You want to make sure you’re choosing the best possible tenant for your space, and that means doing your research ahead of time. Here are 15 ways to vet your future tenants and ensure you make […]

https://contentmanager.io/job/load-image?id=344977&filename=415c1bc904d3469bd7dd91f45255a992.jpg

7 Reasons Your Website’s Organic Traffic is Low

Do you have a small business or another kind of site? All your efforts in building a website can easily be wasted if you don’t consider your organic traffic. You need an organic way to reach your audience and let them know about your company and your products. A great way to increase this kind […]

https://contentmanager.io/job/load-image?id=345809&filename=d6c44a9d215da58ac18bb45f9cd1b3be.jpg

Photo Editing Tricks: How To Use Photo Editing Software

Did you know that the secret behind an incredibly mind-blowing photograph is the editing? Photo editing is the key behind creating those classic, jaw-dropping images you come across on social media. In fact, many photographers have become famous due to their photo editing tricks, such as Brandon Woelfel. Yet, learning how to master photo editing software […]

Footer

Lets Connect

  • Facebook
  • Instagram
  • Twitter

Recent Posts

  • Planning the Ultimate Florida Vacation
  • 20 Facts About Real Estate Business In Australia
  • 15 Ways To Vet Your Future Tenants
  • 7 Reasons Your Website’s Organic Traffic is Low
  • Photo Editing Tricks: How To Use Photo Editing Software

About Us

Hey guys it’s Andrew! I am a writer, a blogger, and a curious human being full of ideas. I remember as a teenager going to my local store to grab a freshly published magazine about the ins and outs of the online business world. Read More…

Facebook

Boy Sets Fire

Copyright© 2023 · boy sets fire