These loans are also known as “homeowner loans” as they allow you to borrow money against your property. If you need a large sum of money and you have a poor credit report, you may consider taking out a secured loan.

However, you should understand the risks associated with a secured loan before borrowing. When you apply for a secured loan, the lender will ask you to offer your home as collateral. If you fail to repay the loan on time, the lender has the right to possess your property and resell it for loan recovery amount.

As you put your home as security, lenders consider you as a less risky borrower. For this reason, the rates of interest on these loans are comparatively lower. Secured loans allow you to access a large sum of money and as the process is completely online, it will not take much time for you to get the required funds.

• Potentially lower rates of interest as you use your property as security for the loan.
• Chances of getting approved for the loan is higher if you have a bad credit score.
• Upon timely repayments, you can build or rebuild your credit score.
• Repay the loan in fixed monthly instalments. It will help you to maintain your monthly budget.

• Your property, or asset, is used by the lender as security so that they can sell the property it if you do not keep up with the repayments. Due to this security, the loans are relatively low in interest and it is normally easy to qualify if you own a property.
• Lenders take into account a number of factors when looking at secured loan applications. These include the value of your home, your income, your personal credit score and any existing debts.
• The rates can be fixed or variable depending on the type of loan you opt for. It is better if you choose a loan that allows you to make fixed monthly repayments every month. As long as the repayments are made in full each month, you will not lose your home.
• If you default on the loan, your home may be at risk of being repossessed. This means the lender can sell your property to recover the money that is owed. Ensure your repayment plan before taking the loan as your property will be at stake.

• If you are struggling to get access to money and you do not own an asset or property, there are various other financing options that you may consider. A secured loan is the best option for those people who need a large sum of money, who own a property and who can afford to repay all the repayments on time to avoid repossession of their property.
• Peer to Peer financing option is one of the most popular ways of borrowing money. Generally, the P2P websites that act as a marketplace bring together people and businesses for the entire process. You can get a loan without visiting the bank as all you have to do is open an account with the P2P lender so that they can transfer the funds to you.
• You can opt for an unsecured personal loan as you do not have to provide any collateral for the loan. Also, you can spread the cost of repayment over several months. When you borrow a personal loan, your property or asset will not be at stake, however, your credit score will be damaged if you do not repay the loan on time.
• Credit cards are also a big relief when you have to manage unexpected expenses. There are deferred interest credit cards that you can use. However, the rate of interest charged on credit cards is high and ay quickly spiral if you do not repay it within time. It also impacts your credit score.