Secured loans are ordinary loans secured by the Bank against collateral. In the real estate sector, the home or a property serves as collateral.
Higher loan amounts
Secured loans are generally associated with higher loan amounts, as unsecured loans, ie loans for which no collateral is provided, can be found in the range of low-level loans. These, in turn, require appropriate credit and regular payment on the customer’s account. From the perspective of the bank, it is almost as if signing a blank check, which is why unsecured loans are also known as blank loans. The bank bears the risk albeit a comparably low and can do so with a hefty interest rate. The home as collateral makes itself noticeably noticeable in the interest rate, because the bank’s risk of losing its money is now negligible.
However, home ownership or undeveloped land does not necessarily have to be offered as collateral for mortgage lending. Also in conjunction with other purposes, it is ideal as security for secured credit. In this way, larger sums of money on favorable terms and at long term feasible.
Installment to pay
The repatriation of a secured loan usually offers more freedom than mortgage lending. Neither fixed conditions, nor a given term or rate limit this freedom. In addition, special repayments offer more comfort for the secured loan. Installment may be scaled back or increased, and the provision of special payments will shorten the term and sometimes even lower the interest rate.
The secured loan offers a wide range of possible applications. So it is ideally suited to increase the value of the home, for example, by a renovation. Also, current, unfavorable loans, which have smaller loan amounts and may be unsecured, can be disposed of. The pooling of several small loans with just as many painful installments is worth a second thought, as there is only one installment to pay, which on top of that is perhaps lower than the sum of the individual installments.
The promise of a secured loan usually does not require any real estate valuation and thus does not incur any court costs. In addition, it is available in any amount within the value of the property presented as collateral. The secured loan can be considered as a long-term loan with terms of up to 25 years. He is similar in some ways to mortgage lending. Here and there, the home is in danger if due to unforeseen reasons, the repayment can not be maintained.
Since the secured loan is secured by assets or property, ie land or houses, it can also be found under the terms real credit or property loan. A security by moving things leans against the Lombardkredit.