Loan Guide: Low Rate Secured Loans

Personal loan products with a low rate secured on your home are really only for people with excellent credit rating. Higher rates are only reserved for bad credit customers, payday loans or unsecured loans.

These are the two most sought after qualities in a loan, but low rate secured loans are only given to trustworthy customers. The company won't have anything to fall back on if you default on the loan (i.e., bad credit loans have high APR because the provider will get as much back off you if you default from the high repayment rates) except your home, so they only have your credit rating to judge you buy.

Of course, you should only apply for secured loans if you have a good credit rating and confidence in your repayment ability, as secured loans could result in losing your home if you can't meet monthly repayments.

Loan products with a low rate secured against your home are often referred to as second charges, if you're still paying off your mortgage. Remember that taking out a secured loan, no matter the rate, will result in you paying back two monthly outgoings each month - one for your home and one for the loan.

Don't take out more than you can afford and make sure the rate is suitable for your finances - some low rates will come with a few nasty little secrets, such as rate increases after a certain period or no extra features on your loan (i.e., inflexible payment options, no choice of payment dates or adverse consequences for late payments) so make sure you're enticed by the loan qualities as well as the low interest rate.

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