Secured loans are availed by placing an asset as collateral, which serves as a security against the loan amount, i. e. , in the event of too many delays or frequent defaults - unintentional, incidental, or intentional - the lender can take over the pledged collateral. To reap the benefits of a secured deal, the borrower must pay his EMI’s (Equal Monthly Instalments = Principle + Interest) on time and in full.
As secured loans are very safe for the lenders, the loan requests get quick attention. Other encouraging characteristics are:
-Competitive APR (APR = Nominal Rate + Loan Processing Charges) depending upon the repayment method - fixed or capped or flexible.
-Negotiable payback terms and loan conditions - early pay offs, extended repayment period, grace period, hidden charges, payment holidays, penalties, payment protection plan (PPI), etc.
Generally, a secured deal has:
-An amount range of £5,000 to £75,000 -An APR range of 7.9% to 19.9 % Variable (typical rate is 13.55 % APR Variable) -A compensation term range of 5 to 25 years
However, a person with an impeccable credit history may get a better deal.
Two major affordability parameters that play a very crucial role in loan approval procedure are:
-Credit history - good or average or bad -Debt to income ratio (DTI = Debts/Income) - current financial standing
Depending upon the above-mentioned parameters, loan seekers are categorised as prime customers, near prime customers and sub-prime customers. The sub-prime customers are further sub-divided as light (low adverse credit), medium (medium adverse credit) and heavy (high adverse credit)
Opting for a http://www.longdogfinance.co.uk