Secured Personal Loans
A secured loan is a loan where the borrower offers some collateral or financial assets to the lender as a promised to pay back the loan. If the borrower does not pay back the loan and defaults, then the lender is secure. He will get his money from the sale of the collateral provided by the borrower. Therefore, if you have security to offer, getting a secured personal loan is possible.
There are some quick collateral loan businesses that you will want to avoid. That business downtown that offers payday loans has extremely high interest rates and you can find yourself trapped in a never ending bind of living from paycheck to paycheck and even spending more in interest than you can keep up with.
Another loan to avoid is the car title loan. Giving up the title to your car in order to make a fast loan is very unwise. When you have to make a loan, go about the right way. Pawn shops will make dollar loans and will sell your item if left there too long and the loan is not repaid.
Legitimate secured loans are made from lending institutions like banks, credit unions and other lenders like Wells Fargo. Loans are made to purchase homes, cars, boat and other luxuries that people want or in some cases where that second car will help in a two-income family.
Applying for a loan is fairly easy and some people even use the Internet. You may want to sit down face-to-face with a bank's loan officer and present your information directly to him or her. Banks may allow up to five years to completely repay a car or other vehicle loan. A loan schedule is made by the lender and since he has you collateral, he feels good about offering you a lower rate of interest. You can choose the term of the loan.
Where Can I Get Small Secured Personal Loans if I’ve Been Through Bankruptcy?
If you're in need of some extra cash for a financial emergency - you need a new tire for your car, you've forgotten a birthday present, you've run into unexpected medical bills - a secured personal loan can help you get back on your feet. Most people, however, don't understand small secured personal loans - they've heard of a normal secured personal loan, where the borrower is using a vehicle, or a house as collateral against a large loan of thousands of dollars - but most people don't know that secured personal loans can come in small increments as well. If all you need is a few hundred dollars, the hassle and paperwork of a large, bank-backed secured personal loan just isn't worth it.
Small Secured Personal Loans
If you've been through bankruptcy, small secured personal loans might be the best way for you to get yourself re-established. By the way if you live in Michigan one of the best resources for you will be Michigan Bankruptcy Planning. Fortunately, banks aren't the only ones giving out secured personal loans. You may have read our article about the types of secured loans you can find. In that article, we mention one great resource for small secured personal loans - pawn shops. Unfortunately, pawn shops carry a bad stigma with them, so many people don't even consider using them as a lender in a pinch. In reality, they're a great resource, and as long as you make a plan and understand how you'll pay back the money you've borrowed, its easy to come out on top.
Collateral for Small Secured Personal Loans
If you live in Illinois and at some point you've been through a Chicago Bankuptcy, you might be one of those unfortunate people caught in the trap of assuming they don't have anything useful to use as collateral for a small secured personal loan. There are plenty of items that will work, and chances are you have a few in your house right now. Anything relatively new and in good working condition is likely to work just fine as collateral - for example: Electronics, like CD players, computers, dvd players, TVs, or video game systems work great - as do musical instruments, jewelry, watches, sporting goods, power tools, or even vehicles. A quick inventory of your house will no doubt yield a number of things perfect for a secured personal loan.
What Types of Secured Loans Exist?
As we've discussed in other articles, all types of secured loans can be a great way for anyone in a financial bind to get back on their feet. Whatever the situation, a secured loan can often allow someone with less than perfect credit to get the money they need. Even people with good credit would be wise to look into a secured loan - oftentimes the added security of collateral will lower the interest rate on the loan.
What types of secured loans exist?
While secured loans are essentially the same at heart regardless of purpose, there are a few specific situations where people often seek out a secured loan. These types of secured loans are often dealt with on terms specific to the purpose of the loan by the lender. Remember - any type of secured loan is different from a normal (unsecured) loan because the borrower is required to sign over some type of collateral to the lender. One type of secured loan we haven't mentioned is a secured business credit card. Now, on to specific types of secured loans:
Secured Wedding Loan:
Secured wedding loans are becoming increasingly popular - it is estimated that the average wedding in America now sets the happy couple back $28,000. With such a huge expense looming, the bride and groom often seek out a loan to cover the expenses - and with the generally frivolous nature of the loan to begin with, matched with the uncertainty of a new marriage, lenders are often wary of giving out unsecured loans to cover wedding expenses. If the lender is willing, they will often offset the risk with higher interest rates. If you're interested in getting a secured wedding loan, keep in mind that bringing some collateral to the table may be a great financial decision in the long run.
Secured medical loans:
We've discussed secured medical loans on this blog before, but for the sake of thoroughness, we'll briefly discuss them again here. Medical expenses can be huge - that's no surprise to anyone who has had a trip to the doctor lately. With poor insurance (or no insurance), people often quickly find themselves out of money and unable to pay for expensive medical procedures. Secured medical loans can help offset these costs.
Secured Business Loans:
Starting a business is rarely an inexpensive venture, and by its very nature, the person starting the business often finds himself without the cash necessary. But if you get in over your head you might have to go through debt consolidation program to consolidate your debts. Starting a business is also a risky venture - and banks know this. While it is certainly possible to get an unsecured business loan with the right credentials and business plan, there are a number of things that can easily cause a lender to turn you down. Securing the loan with collateral is often the most hassle-free way to change their minds.
Secured car loans
Car dealerships are notorious for turning people down at the final step of purchasing an automobile due to bad credit. Its an unfortunate, and embarrassing to the customer, and frustrating to the dealership. By providing collateral and lining up financing beforehand with a secured car loan, you can save yourself the trouble of being turned down at the dealership. Even if your credit isn't terrible, its worth looking into - the money saved on interest can add up over the course of a loan.
Bad Credit Secured Loans
Your car broke down. Your roof needs repaired. Your kids needs braces. Financial crisis happen every day to people in all walks of life, and every day, people figure out how to make it. Credit cards often save the day, but sometimes it will be a loan from a friend or a family member.
Often, banks will lend you the money you need, based solely on your good credit. Unfortunately, not everyone has credit, or an understanding friend available. The bank considers many people with bad credit too risky to lend money based on credit alone. Fortunately, bad credit secured loans are available to people who don't qualify for other types of lending.
Secured loans are perfect for people with bad credit - your credit basically acts as a voucher for your ability to pay back a loan. If you've got bad credit, the bank simply isn't willing to lend you money. With a secured loan, collateral is used instead of credit to vouch for you. The collateral can be any number of things - a car, a house, or other valuables are often used. The most common secured loan is a 2nd mortgage - where the house is used as collateral for your loan.
Getting a bad credit secured loan can be difficult when using a normal bank. Banks generally like to deal in more common loans - those involving good credit and a cosigner. To get a bad credit secured loan, you'll need to dig a bit deeper, and find an institution which specializes in bad credit loans, or secured loans might be the answer for you. Once you know what to look for, they generally aren't too hard to find. IF you'd rather take your search for a bad credit secured loan to the internet, you'll find plenty of sites that are more than willing to give you quotes based on your specific situation.
If you need a loan, and you've got bad credit, hope is not lost. Do a little research, find a provider for a bad credit secured loan, and you'll be back on your feet in no time.