There are various kinds of loans available one of which is an unsecured loan. As this loan is as stated unsecured everyone is theoretically able to apply for this loan. Theoretically that is as obviously loans are subject to status, income and so on.
As these loans are unsecured it means that if the borrower defaults the lender does not have much of a chance of recouping the money.
The lack of security involved in these unsecured loans is the reason that lenders attach high rates of interest normally to these unsecured loans.
With unsecured loans the granter of the finance will normally ask for proof of the purpose of the loan.
It is not just the matter of the borrower stating that the loan is to be used to buy a new kitchen and being handed the loan cheque, as the lender will generally ask for sight of two or three estimates for the kitchen.
For those living with parents, etc. or in rented property the only loan for which they are eligible is the unsecured loan.
However homeowners are in a different position as they can also apply for secured loans often called homeowner loans or even secured homeowner loans.
The terms secured loans and homeowner loans are fairly self explanatory. Secured means that they must be secured against an asset which in this case is the borrowers property, and homeowner loans as only those who own their own property can apply.
As the loan is secured on the homeowners property the interest rates for these secured loans is always lower than that of the unsecured variety of loan.
In addition to secured loans coming with better rates of interest than the unsecured loan the secured loan lender does not ask for proof of what the loan is to be used for and in fact secured loans can be used for almost any purpose..
So saying there is really no better type of loan for homeowners than secured loans. - 30462
As these loans are unsecured it means that if the borrower defaults the lender does not have much of a chance of recouping the money.
The lack of security involved in these unsecured loans is the reason that lenders attach high rates of interest normally to these unsecured loans.
With unsecured loans the granter of the finance will normally ask for proof of the purpose of the loan.
It is not just the matter of the borrower stating that the loan is to be used to buy a new kitchen and being handed the loan cheque, as the lender will generally ask for sight of two or three estimates for the kitchen.
For those living with parents, etc. or in rented property the only loan for which they are eligible is the unsecured loan.
However homeowners are in a different position as they can also apply for secured loans often called homeowner loans or even secured homeowner loans.
The terms secured loans and homeowner loans are fairly self explanatory. Secured means that they must be secured against an asset which in this case is the borrowers property, and homeowner loans as only those who own their own property can apply.
As the loan is secured on the homeowners property the interest rates for these secured loans is always lower than that of the unsecured variety of loan.
In addition to secured loans coming with better rates of interest than the unsecured loan the secured loan lender does not ask for proof of what the loan is to be used for and in fact secured loans can be used for almost any purpose..
So saying there is really no better type of loan for homeowners than secured loans. - 30462
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