Secured Personal Loan


Secured Personal Loan

Secured Personal Loan

A secured personal loan is considered to be a loan where the borrower pledges an asset that they own as collateral for the loan. Once a borrower pledges an asset as collateral, the secured debt is owed to the creditor who gives the secured personal loan. A secured personal loan is usually the best way to acquire a large amount of money. Putting your home or car up as collateral is usually a safe bet because most borrowers will do everything to make sure that their secured personal is repaid. A secured personal loan can also be classified as a home equity loan or a home equity line of credit.


There can be some benefits to taking out a secured personal loan versus an unsecured loan. One advantage of a secured personal loan could be that you will usually be able to borrow more if you give the lender a secured asset. The value of the asset for the secured personal loan is what will set the limit on what you will be able to borrow. Another advantage of a secured personal loan is these types of loans will usually have a lower interest rate. The reason for a lower interest rate for a secured personal loan is that lenders feel that they are in a much safer financial situation because if you pay the loan as agreed then they get their money back plus the interest of the loan. If you default on the secured personal loan, then the lender can take ownership of the collateral in order to get their money back that is owed. Finally, one last advantage of a secured personal loan is most often your credit history will not be factor. Some lenders are willing to overlook your poor credit history because you are providing them with an asset against the loan.