When you take out secured loans you are pledging an asset as collateral for the loan should you not be able to pay it back. This is usually your home so make sure you consider all the issues before you take on such a loan.
The upside of this type of arrangement for the lender is that, because the loan is secured against a physical asset, the risk to them is lower. That is, if you were to default on the loan, the lender could take possession of the asset, sell it and recoup some or all of the amount lent to you.
As the risk to the lender is lower, secured loans may be available on more favourable terms than unsecured loans and the lender may be less concerned if you have had had credit history problems in the past. However, although the headline rate may be attractive it is always worth being very clear on the charges associated with the loan as they can be high.
A secured loan could be useful to you if you are wanting to borrow a larger amount over a longer time frame. In addition they offer flexibility in that, typically, lenders aren't restrictive as to the purpose of the loan.
However, you need to be very sure that you have carefully considered your budget regarding repayments now and in the future. It is essential that you can maintain your monthly repayments as, if this is not the case, there is a risk that you could lose your home. Speaking to a financial adviser can help you decide whether this type of loan is right for you. If you wish to speak to an LGBT-friendly financial adviser, please enter your postcode under the map on your right, to find an adviser near you.
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