Personal Loan - With Special Emphasis on Secured Credit

By: Angelo Drew

Compound human desires have always been the driving forces behind all inventions and new inventions the origin of new desires. It is an infinite loop and money its key ingredient as well as a major concern. Hence, the business of credit has always been an integral part of all social systems.
It is known fact that a secured deal is the most cost-effective transaction for all parties involved. For the lender it is a deal that guarantees payback, whereas, for the borrower it is a deal that ensures maximum loan benefits - subject to the lender's credit policy and the borrower's credit records.

Even market report shows that the demand for secured personal loan is on a rise, as it is much cheaper than unsecured credit and cash substitutes like credit cards, store cards, charge cards and overdrafts. Borrowers are slowly but surely realising that multiple unsecured debts prove to be more costly, as they have high interest rates.

Hence, more and more people are opting for secured credit even for small monetary requirements. According to some prominent industry experts, besides rising interest rates attached to unsecured credit, the rising equity levels in homes in the UK is also responsible for this shift in trends.
As a result, loan seekers who are capable of pledging collateral (homeowners and property owners) are not hesitating to offer their asset for benefits like quick attention, high credit range (typically between ?5,000 and 250,000), low interest rates (typically between 6.7% and 19.9%), multiple rate plans, different repayment methods, and negotiable loan clauses.

Though the value and benefits of pledging collateral are indomitable in the loan market, a secured type of personal loan deal is not 100% safe. Disadvantages like clientele limitation (credit for a homeowner and property owner only), slow approval procedure (due to property evaluation process) and repossession threat (in case the borrower fails to payback) are making unsecured credit popular in the UK loan market.

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