Though there are other sources also from where the person can procure funds but they are not considered as convenient may be due to their high interest rate and longer approval period. On the other hand, secured loan are known for its low interest rate and faster approval. In secured loan collateral placed is only the reason as to why the lender offers such convenience. Collateral gives the lender a sense of security in regard to any non repayment of the monthly installment.



Usually, there are varieties of interest rates which are being offered by the lender but the most common are:

•Fixed interest rate

•Variable interest rate

In fixed interest rate, the rate do not fluctuates with the change in the market forces or any other factors. In this the person pays a fixed rate of interest on the loan amount. They are considered safer as compared to variable interest rate. As in variable interest rate, the rate fluctuates with the change in the market forces.

Commonly, the people have misconception that secured loan are very riskier, which is not true. It is absolutely right to say that if the person fails to make repayments then the lender has the legal right to seize or sell the collateral placed. But if the person is sure that he can easily meet all the repayments then there is no other best option of finance than secured loans.

Credit score, no matters in availing secured loan but yes, it matters to the lender while offering interest rate. A good credit scorer is always offered with low interest rate and longer repayment period. It doest mean that a bad credit scorer will be obliged to pay high rate of interest rather they are also competitive in the financial market. And, above that by availing secured loan the person with less than perfect credit score can improve his credit score by making timely and duly payments. Once the credit score gets improve then he can also avail all the advantages of secured loan which a good credit scorer is availing.

Online mode of applying secured loan is considered as the cheap and convenient way as it involves low cost and can be applied at any time and from any where as per the convenience. The lender also prefers dealing with an online applications as there is no overhead costs which lowers the cost and add up to their profits. In this way both the lender and borrower gets satisfied.

Thus, secured loan can be the best financial partner in the crisis situation.