Apply for Secured Personal Loans

By: Angelo Drew

Loans are taken to be paid back and if you don't, you are calling for adverse repercussions. These may include loss of property at stake (if any), CCJs and bankruptcy status. In case of unsecured loans, there is very less flexibility in terms of repayment options. This is because the borrower doesn't put any of his assets like home as security. The lender, therefore, charges high interest on unsecured loans, and doesn't give any benefit of flexible repayment options and other advantages.

However, in case of secured personal loans, the borrowers get many advantages. The most lucrative feature of secured loans is that they carry low interest rates. Then you can choose from the various repayment options cited below:

  • Fixed Rate of Interest- Under this plan, the borrower pays a fixed rate of interest for a certain period of time. The monthly installments, therefore, remain fixed during a specified period mentioned in the loan agreement. This is irrespective of the changes in the base rate, decided by the Bank of England.

  • Flexible Rate of Interest- Under this scheme, the APR on your personal loan fluctuates on the basis of the Bank of England's interest rate. The monthly installments, therefore, fluctuates.

  • Interest Only- If you have taken a secured personal loan with interest only scheme, you would be paying only the interest for the whole term of the loan. The borrower will pay the remaining principle amount at the end of the term of the loan.

  • Partial Interest and Partial Repayment- In this plan, the borrower is required to pay only interest for a certain period of time, and then he would start paying both the interest and the principle amount that would constitute his EMI (equated monthly installment).

    So, apply for secured personal loans if you want to avail the advantages cited above. One does not get so many benefits in case of unsecured loans because the lender is at a very high risk.

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