What Can A Secured Loans Be Used For?

By Author: John O’Farrell
Total Articles: 23
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Getting a secured home loan is a convenient way to borrow money. Rates are generally affordable thanks to many lenders providing much competition and the process is fairly uncomplicated. This article assumes that you already have some knowledge about the process of getting a secured loan and therefore asks a different question than the usual “what’s a secured loan?” Instead, this article delves into the different possibilities of what to do with the money once the lender has transferred it into your bank account!

Perhaps the most popular use for secured home loans is home improvements. A new kitchen, a larger bathroom or even an extension to the house not only brings the borrower an enhanced quality of life but also increases the value of their home – a double win! But many borrowers have something more indulgent in mind: we’ve seen people take out what I guess you could call a secured holiday loan to take that trip of a lifetime or as a means to finance a classic car purchase. In essence, in the UK secured loans can be a great way for people with equity to turn their dreams into reality!

Secured loans ...
... often do have a more serious use though – especially today when more and more people are getting themselves into financial trouble. Secured loans for bad credit borrowers are now being taken out on a more regular basis and although these are often subject to a higher rate of interest, they can be the only way for people to pay off the debts that they owe and start again. By consolidating the debt and therefore only being subject to one monthly payment, people often find it a lot easier to manage their finances and start to get on the road to recovery.

Occasionally people also take out secured bridging loans, which are essentially a way of providing a short term financial solution – essentially a loan that is paid back within either a few months or years. The interest on secured bridging loans is often high so those that take this type of loan should always be sure that they can meet the repayments, as the consequences can be disastrous if they don’t. As a result these aren’t good secured loans for bad credit borrowers.

This type of loan is not common as most people prefer to take out unsecured loans when looking for something short term. One place that they are very useful though is when looking for some extra finance to purchase a new home – especially if the new property is to be rented out and therefore the rent can cover the loan repayments.

As can be seen, a secured loan has a number of different uses, all of which entirely depend on the personal circumstances of the individual. Just remember though that when looking, always make sure to use a secured loans comparison site, as there could well be a much better deal available on the UK secured loans market than you had thought!

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Choice-loans.co.uk offers homeowners secured loans. People in the UK can search to find the cheapest secured homeowners loans.