Secured loans

[jackie0]

Would you advice that I take out a secured loan? There are some sheets titled mortgage deed in the documentation they sent out for signature. Does that mean the loan will be secured? IS it alright to take out a secured loan?

[dodgyshirt]

wouldn`t touch one with a bargepole unless I was desperate and the lender insisted upon it.

[AlanS107]

A secured loan is a loan that is backed up by some sort of asset that you have, usually your house. If you default on the loan, the company will be able to sell your asset, i.e. your house, in order to get their money back. All they are interested in is to get their money back so they will make no effort to get the best price. Indeed, it is in their interest to sell as quickly as possible and therefore for a low price.

The advantage of you having a secured loan is that it may be the only way you can get a loan, and the interest rate will be lower than an unsecured loan.

Everybody that takes out a mortgage is taking a secured loan so they are not all bad, otherwise there would not be many people that could buy a house.

However, to use your home to secure other loans, apart from your main mortgage, is not to be advised. Your home will be sold if you cannot pay back the loan. Is this a risk that you want to take?

If you are in debt then go to www.fool.co.uk and look at the dealing with debt forum. Also, there are many other discussion forums regarding loans etc. It's free and you will get answers from many experts.

[jackie0]

Thanks a lot dodgyshirt and AlanS107. Very helpful stuff.  What's a bargepole though?

The secured loan I wanted to take is at 11.7%.  Is that too high? I will pay back as soon as possible. I'm not worried about not being able to pay back coz I will.

[Miss Zippy]

11.7% is very high, unless you have a poor credit rating/CCJs etc in which case it might be reasonable. You can get unsecured loans from places like Alliance & Leicester, Lombard Direct and Intelligence Finance starting from 5.9%.  Have a look at moneysupermarket.com.

[Marsh]

A barge pole is (or  was) a long pole used for propelling barges.  The phrase means "I wouldn't go anywhere near it."

[jackie0]

:) Thanks both of u.