What are the benefits of a secured loan?
The best secured loans from Logbook Loans…
At Logbook Loans we offer a range of loans that are secured on your vehicle – car, van, bike or classic car. But what does “secured” mean? What exactly is a secured loan and what are the benefits?
A secured loan is a loan that is dependent on some asset that you already own. For many secured loans, this will be your property; for a logbook loan it will be your vehicle.
For the duration of the loan your asset serves as a backup to the lender. If for any reason you are unable to repay the loan then as a last resort the lender could claim your asset to use to repay the loan instead.
How this works for a logbook loan is that when you take out the loan you give your registration certificate – V5 – to the lender. The V5 is also known as the logbook, hence the term logbook loan. The lender holds on to your logbook for the duration of the loan, but you keep the vehicle and have full use of it as normal. As soon as the loan is repaid, the V5 is returned to you and the lender has no further claim on your vehicle.
If anything went very badly wrong during the loan, and you were completely unable to repay, then the lender could claim your vehicle to get their money back. However, a responsible lender will always try to work with you to come to some other arrangement if at all possible.
So a logbook loan is a secured loan because the value of your vehicle is acting as a backup just in case you are unable to make all the loan repayments. This is beneficial to the lender, but a secured loan also has various benefits to the person taking out the loan.
Five of these benefits are:
- A secured loan is usually much easier to obtain than an unsecured loan – particularly if you have a poor credit history. This is because the loan is secured on your asset, so there is less risk to the lender, and they are likely to be more prepared to overlook your bad credit rating.
- A secured loan tends to be more affordable than an unsecured loan. Interest rates on secured loans are usually lower than unsecured credit, because your asset means that the loan is less risky for the lender.
- Secured loans also tend to offer the choice of longer repayment periods. You can work out with your lender a monthly payment that you can comfortably afford, then will have this fixed monthly payment for the duration of the loan. This makes it easy to build the repayment into your budget and help to ensure that you will be able to make the repayments.
- You can use a secured loan for any purpose you choose, including consolidating other debts into a single, more affordable payment with a lower rate of interest. Other purposes could include home renovations, medical or other personal expenses, or starting a business.
- By taking out a secured loan and ensuring that you meet the repayments, you can begin to repair your credit history. You are proving that you are able to handle credit and make repayments. All this will begin to boost your credit rating.
So as you can see, if you need a loan for any purpose then a secured loan might be your best way forward. So why not take a look at the range of loans offered by Logbook Loans? You can apply online and if your application is accepted you can now get the funds you need within an hour of approval. You don’t even have to leave the comfort of your own home.
Remember to check back here soon for more financial and lifestyle tips from Logbook Loans.