What Is A Secured Loan by:Joseph Kenny
What do you think is the biggest concern of banks when they lend you money
? Well, cautious and conservative as they are, what banks fear most is that you wont be able to pay back the loan. It is not so much a question of trust, if you try to get away from them, they'll hire a debt collection agency or have you called up before a court. What they fear is simply that you will not be able to pay them back, even though you want to.Looking at it from their point of view it makes sense. Every day they hand out a massive amount of money to total strangers. Each mortgage alone averages over hundred thousand pounds. That's a lot of your money to simply hand over. So what banks do is they get security. This means that even if things go wrong for you, they will probably still get their money back.
A secured loan must be secured over a particular asset. An asset is anything that's worth money. The asset could be a car or a famous painting, but usually, especially for mortgages, the asset the banks are interested in is your house. The loan will therefore be secured over your house.
In practice what this means is that while the deeds to the house are in your name, the bank can have their name put on the deeds that will give them a right to take and sell the house in the event that you default on your loan payments. Repossessing the house would require fair notice and a chance for you to make repayments, and they would also need a court order, but ultimately, that's what would happen. You would be kicked out and the bank would then sell it, take what they require to pay back their loan, and the rest they would pass on to you.
Therefore, it is unadvisable to allow loans to be secured over your home to carelessly. If you find yourself in a position where it is difficult to meet all your repayments, you may want to take out more loans. In order to do this you will typically be asked to secure the loan over your house. You may be willing to do this, as it is the only way to get the loan, but you should know that if you were ever to fall behind on the payments, your house would be at risk.
About the author
Joseph Kenny is the webmaster of the loan information sites http://www.selectloans.co.uk/ and also http://www.ukpersonalloanstore.co.uk. At the Personal Loan Store you can find some of the latest secured loans explained in detail. Energy Savings in the Asphalt Manufacturing Industry by:Ryan Worral, P.Eng. Credit Card Reward Programs: Getting The Most Out Of Your Credit Cards by:Carrie Reeder What to Look for in a Financial Advisor by:Jay Moncliff Is It Time To Pass On Your Wisdom? Are You Ready To Be A Mentor? by:Adam Coole Managing your Reputation by:Karen Hinds Avoiding Forex-Related Frauds and Scams by:Marquez Comelab Sales Training Success Tip - Take Responsibility for Your Results by:Ike Krieger Refinancing Your Home by:Joseph Kenny The Benefits of Trading The Forex Market by:Marquez Comelab Debt Consolidation Help- Employ A Helping Hand For Debt Elimination by:Alex Jonnes Refinancing Costs - What To Expect by:Carrie Reeder Reasons of Getting Rich by Buying Pre-foreclsure by:Shawn Daren Loan Cover - Watch Out For Payment Protection Sharks by:Michael Challiner