Loans buzz» secured loan http://loansbuzz.com Wed, 08 Sep 2010 03:36:24 +0000 en hourly 1 http://wordpress.org/?v=3.0 What is a Secured Loan and Who are Eligible to Get Secured Loans http://loansbuzz.com/what-is-a-secured-loan-and-who-are-eligible-to-get-secured-loans/ http://loansbuzz.com/what-is-a-secured-loan-and-who-are-eligible-to-get-secured-loans/#comments Wed, 01 Sep 2010 10:58:55 +0000 Ravi http://loansbuzz.com/?p=2721 What is a secured loan? It is a kind of a loan that can be taken out at very low rate of interest, even 5-6% on the principal amount. But this can be done only if you have a property or a valuable asset that is worth the money you are borrowing or more. Collateral is what this property for mortgage is called. This collateral could be your UK home in the heart of London, or in Hampshire or in Nottingham, or a car that is worth the loan. Secured loans take a little more time than other quick loans to be issued since a whole lot of paper work is to be done, but also gives you a lot more time to return the amount. And with a low rate of interest, the amount you would need to pay back will also be relatively less.

The basic criterion is that 85% of the property would be seized if the borrower cannot somehow arrange for the money within the allotted time. Banks like Royal Bank of Scotland Group with headquarter in Edinburgh, HSBC and Barclays with their head quarters in Canary Wharf etc in UK, suggest such points.

Some other eligibility issues to be kept in mind is that-

The borrower has to be an adult, that is minimum 18 years of age is prescribed.

The borrower must have a source of income. A constant in flow of income can improve even a previously bad credit history. If you don’t have a steady income, if you do not earn, what should the bank take as a guarantee that you would pay back in time? Banks never take such risks even if you produce a property.

Most importantly, you MUST have a property that is worthy of evaluation against your income. There has to be some guarantee other than your income that the bank can breathe a sigh of relief. The bank needs to know that there is no way it would lose the money. The collateral is a backup plan, basically.

Banks still look into the credit record. To have a good credit, if not impressive is very important. A poor credit history would make it very tough to get even a secured loan. And even if you bag a loan, the rate of interest will be much higher. Worse the credit history is more will be the interest charged on your loan amount!

Quick secured loan may be wanted to be taken out because of several reasons. One of the most popular reasons is debt consolidation. Many people end up taking quite a few loans at a time and end up not being able to clear off any of them. In such situations, a secured loan can be taken of the amount of the sum of all the loans. This helps because then separate interest rates, dates of payment, loan amount etc need not be remembered. Details of only one loan are to be worried about. The other reasons for taking out a secured loan are: starting a small business, to supplement wedding expenses, for Christmas gifts, for paying tuition fees by students, for holiday trip or medical expenses.

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]]> http://loansbuzz.com/what-is-a-secured-loan-and-who-are-eligible-to-get-secured-loans/feed/ 0 Secured Loans – What are Secured Loans? http://loansbuzz.com/secured-loans-what-are-secured-loans/ http://loansbuzz.com/secured-loans-what-are-secured-loans/#comments Fri, 20 Aug 2010 06:02:54 +0000 Ravi http://loansbuzz.com/?p=2654 There are two categories of loans, namely secured loans and unsecured loans, and the secured loans are preferred by most borrowers. This kind of loan originated many decades ago and this served as the basis of the different types of loans.

Many years ago, this has become a usual transaction among business owners or land owners and creditors. And as time passed by, it has gone through a lot of modifications and several financial institutions have adopted the scheme and added interest rates into the picture.

When we say secured loans, it means that an individual can borrow money provided that he or she has collateral. The collateral serves as a security for the financial institution in exchange for the loan they have extended to individuals in case of failure to pay. People who avail of such loans are given certain terms with regards to the repayment of their loans and on the interest rates.

Secured loans are intended for people who are in need of a huge amount of money and it can easily be availed as long as there is acceptable and valuable collateral. The only risk in this kind of loan is found on the side of borrowers for if they won’t be able to repay the lending institution, their assets that were presented as collateral shall be foreclosed.

There are two ways to obtain a secured loan. One is through the traditional way where one has to personally transact with the lending institution, while the other is through the Internet wherein a person can apply for a loan virtually. The latter is the most convenient way to get a loan because the traditional processes are simplified and that it can be done right in the comfort of one’s home.

The collateral of a secured loans are also categorized into two. When you avail of a housing loan, the collateral that may be presented is the home itself. In the event that there is lapse on your repayments, the lending institution shall redeem your property. Such property will then be offered for sale and the money produced out of the sold property will serve as your payment. On the other hand, the collateral may only be in the form of a claim or security because it doesn’t really involve a great amount of money. For instance, down payment for a car. Although no property is risked in this second category, it doesn’t mean that no repossession will take place in case you can’t repay your loan.

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]]> http://loansbuzz.com/secured-loans-what-are-secured-loans/feed/ 0 Three Significant Types of Personal Loans http://loansbuzz.com/three-significant-types-of-personal-loans/ http://loansbuzz.com/three-significant-types-of-personal-loans/#comments Fri, 20 Aug 2010 00:05:41 +0000 Ravi http://loansbuzz.com/?p=2649 There are many types of personal loans categorized on the basis of loan amount, loan tenure, and interest rate. The three significant types are secured loan, unsecured loan, and line of credit.

A secured loan is a loan in which the borrower has to offer or pledge some asset like a car, home, or land in the form of security to ensure timely payment of the loan. Banks and financial organizations easily issue this loan because they have collateral with them until the time the borrower pays back the entire loan amount with interest. If in case the individual fails to repay, the financer repossess the asset in order to pay off the loan amount. This is one big disadvantage of a secured personal loan. On the other hand, there is one key advantage and that is lower rate of interest which eventually results in lower monthly installments.

An unsecured loan is the one that does not require any kind of security or guarantee against the borrowed loan. Such a loan is given for small amounts and is issued only if the borrower has good credit. As there is no security with the financer, the rate of interest is comparatively higher than that in case of a secured loan.

Line of credit is another significant type of personal loan. It is a type in which a bank or vendor offers a pool of money that the borrower can use for a specified period of time. Depending on the need and requirement the borrower can draw upto the maximum limit during the specified time period after the amount of credit is determined. It can be secured as well as unsecured. The best part of this type is that the interest is paid only on the money actually withdrawn.

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]]> http://loansbuzz.com/three-significant-types-of-personal-loans/feed/ 0 Benefits & Advantages of Secured Loans http://loansbuzz.com/benefits-advantages-of-secured-loans/ http://loansbuzz.com/benefits-advantages-of-secured-loans/#comments Thu, 19 Aug 2010 14:58:31 +0000 Ravi http://loansbuzz.com/?p=2646 Secured loans are loans that are issued against collateral. The borrower pledges any asset like car, home, land, stocks, or bonds with the financer in lieu of the loan. The bank or the vendor will enjoy the ownership and holds all the right of the asset till the time loan amount is completely paid back. With this type even a huge amount can be granted to meet the needs of an emergency situation.

Many people prefer going for secured personal loan because of the enormous benefits it offers. Some of the significant advantages are as follows:

One key advantage of secured loans is that the monthly installment is comparatively lower than unsecured loan. This is because the borrower pledges an asset in lieu of which the lender issues the loan. Because of the security offered, the lender offers loan at lower interest rate that ultimately reduces the EMI (Easy Monthly Installments).

The borrower offers a property, land, jewellery, stocks, shares or bonds to the lender to get some finance. This security keeps the lender assured that the borrower will repay the loan within the specified period. If the receiver fails to repay, then the lender has full right to sell the collateral to pay off the loan. This advantage allows the lender to issue larger loans

There is an option to choose a longer period for repayment of loan as compared to the unsecured loan. The tenure can stretch upto 20 to 30 years in accordance to the convenience of the borrower.

To get this type of loan, the lender is least bother about the credit. Even if the borrower has bad credit, the financer will issue a loan against a security. Unlike unsecured loans there is no pressure of credit score when applying for a loan.

Another great advantage of secured loans is that they are considered a great source of debt consolidation. Many people apply for this type to pay of the present dues in all aspects of life. Taking this loan does not require any kind of specification for using the amount. The receiver is free to use the money at his or her own convenience and to fulfill any personal nee

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]]> http://loansbuzz.com/benefits-advantages-of-secured-loans/feed/ 0 How to Get a Loan in India http://loansbuzz.com/how-to-get-a-loan-in-india/ http://loansbuzz.com/how-to-get-a-loan-in-india/#comments Wed, 28 Jul 2010 06:20:22 +0000 Ravi http://loansbuzz.com/?p=2512 In this modern world everyone are living on loans, Individuals borrow, Business borrow, even Countries borrow. Most of us borrow on one occasion or the other occasion. We need loans for buying a dream home, a car, health, marriages or for education.

If you ask for a loan the first thing the banker looks is whether you have enough cash flow and capacity to repay the it. Then comes your credit history, how good are your earlier repayment tracks, what are the other commitments you have, what is the purpose of loan and your profile.

If your income does not support the EMI there is a very little chance that the banker will approve your loan. The EMI must be in your means. If your income is not eligible you have to go for a smaller loan or go for a longer tenure, where the EMI will be less. If you have any other loan obligations the best way is to clear them if the outstanding loan amount is less. Few bankers also take over the existing loans, so allow the bank to take over the other loans where the outstanding is less, this way you may be eligible for higher loan amount.

But the worst scenario for any loan rejection is CIBIL problem, if there are any cibil problems then the loan application will be rejected. The main CIBIL problems are related to your earlier loans, credit cards. If you have defaulted the payments in any of the earlier loans or settled the earlier loans or credit cards then they will have a negative impact on your credit rating. Even late payments of loans and cheque bounces will have a negative rating. So one has to take enough care when taking any loan, so that he can repay the entire loan, in case he defaults in repaying that loan, then getting any loans in the future will be very difficult.

The purpose of the loan is also important for the banker. Say if an individual is asking for a mortgage loan, the banker should be satisfied the purpose for which the loan is taken, then the profile is also important. Most bankers in india maintain list of negative profiles for which they will not lend. Some banks also have negative area lists. Banks need to be convinced for lending to negative profiles and for people residing in negative areas. Most indian banks are also not lending to bachelors not staying with their parents and staying in bachelor rooms or hostels.

The best thing is if you are planning to take a loan in india then you need to plan for it for any where between 6 months to 3 years. If you think it is too long a period then you should always be prepared as you don’t know when you need a loan. Why 6 months to 3 years? Bankers will look at your average balances in the bank for the last six months and in some cases for one year, they check the bank statement for any cheque bounces during that period, loan commitments for the last six months and any nes loans taken in recent period.

For loans like home loans they also look at the last 3 years incomes. Residence stability is also very important. The banks see since how long the customer is residing in the current residence, the longer the more beneficial, similar is the job stability. Current job experience should be more than 1 year at least more than six months. Maintain average bank balance of 1.5 times the planned EMI, see to that there are no cheque bounces, no late payment charges for the credit cards. For all these reasons, depending on the type of the loan you take, I recommend you to plan for 6 months to 3 years or best way is to always be prepared.

Documents are also important. Pan card is must for any loan above Rs. 50000. Residence proof preferably in the name of the borrower is important. The best is a land line telephone bill. Previous employment letters, form 16, previous loan tracks. Any settlement letters (must be preserved) for previous loans and credit cards.

In case of bad credit you can start fresh by taking a secured loan, most people give loans for secured loans like mortgage loans, car loans and home loans in india but unsecured loans are very difficult to come in india if you have a bad credit rating .

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]]> http://loansbuzz.com/how-to-get-a-loan-in-india/feed/ 0 Unsecured Bank Loans http://loansbuzz.com/unsecured-bank-loans-2/ http://loansbuzz.com/unsecured-bank-loans-2/#comments Sun, 14 Feb 2010 15:39:40 +0000 admin http://loansbuzz.com/?p=822 Unsecured bank loans are granted to a borrower without any security. Unsecured loans are basically those loans which are very risky and the interest rates of the unsecured bank loans are very high when compared to the normal secured loan.

Many banks are providng unsecured bank loans to their customers. Unsecured bank loans are the loans which you can get on the basis of the good credit history. Few banks are providing unsecured loans for the people who are having both good credit and bad credit history.

You need to submit your credit report to the bank along with your loan application in order to get unsecured bank loans. The banks will review your credit report and approve the loan amount. For getting an unsecured bank loan the applicant need to have a minimum age of 23 years.

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