Personal loans have two sub-types – secured personal loans (for homeowners and property owners) and unsecured personal loans (for all – tenants, students, homeowners and property owners).
Though both sub-types offer significant credit solutions, secured debts are more beneficial for those who are capable of pledging collateral against the loan amount, as they are much cheaper than other credit options like unsecured loans and payment cards.
Hence, they are most suitable for big monetary requirements, for people facing an adverse credit situation and for people who have been denied unsecured credit. The benefits of availing secured personal loans are:
Quick attention – collateral guarantees payback
High credit limit – the typical range is £5,000 and £250,000
Competitive low APR – the typical range is 6.7% to 19.9%
Multiple rate plans – fixed or variable or discounted or capped or flexible
Different repayment methods – capital or interest only or partly interest and partly capital
Flexible loan terms and conditions – deferred payment up to 6 months, repayment holiday and accelerated repayment
Please note: The credibility criteria’s for secured personal loan approval are: UK residency, over 18 years of age, past credit record, employment status, debt to income ratio and value of the pledged collateral.
It is often said that no loan product is 100% safe. Secured personal loans are no different. The limitations of availing secured personal loans are:
Clientele limitation – these loans can only be availed by homeowners and property owners
Repossession threat – irrespective of the reasons, repeated defaults or non-payment can lead to collateral seizure to recover the loaned amount
Slow procedure – the overall loan application process is slow, due to time-consuming property evaluation procedures
