Secured Loans vs. Unsecured Loans

You need extra cash… now. But you’re not sure whether to turn to secured loans or unsecured loans and your friends and family aren’t able to give you much helpful advice.Fortunately, we can provide you with the assistance you need to make the best financial decision based on your current fiscal requirements or personal aspirations.

Here’s the straight scoop on secured vs. unsecured loans:

Secured Loans Offer Better Protection than Unsecured Loans

Because you’re putting up some kind of collateral (property, savings, et cetera) when taking out secured loans, both you and your lender will have a better sense of formal and legal protection. For you, the terms and payment schedules are easily laid out; for the financial institution allowing you to borrow your secured loans, there’s a measure of security if you default on your repayments.

Conversely, unsecured loans offer little comfort in this area for either side.

For example, if an acquaintance or colleague loans you a sum of money with the “understanding” that he or she will be repaid, both parties involved (namely you and him/her) could find yourselves in a sticky situation somewhere down the road. Perhaps you misunderstood the repayment plan; or maybe he or she forgot the agreed upon amount of interest on the loan. To remedy the situation, you both might have to seek out costly legal advice, all because the loan was essentially “unsecured.”

Secured Loans Come in Higher Amounts than Unsecured Loans

Again, because you’re putting up some kind of collateral against your loan, a lender is much more likely to approve you for secured loans in amounts of up to (and sometimes beyond) £100,000. As long as the financial institution can be certain that you’re a good prospect and that your assets are not already being used as collateral for some other loan, you can often get up to 125% of their value.

Alternatively, unsecured loans are usually made for smaller amounts of cash, due to their riskier nature. Because there is no “lien” against property or savings, the lender has little good reason to approve a large loan amount.

Secured Loans Mean Faster Approval

Finally, if you’re looking to get quick approval, secured loans are a much better choice than unsecured loans, as many secured loans can be made over the telephone or even online.

To find out more about secured loans or to start the process of obtaining one, visit our site at www.dbsfinance.co.uk.

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