Saturday, November 13, 2010

Secured Loans


A secured loan is a type of loan in which the borrower puts up some form of collateral, such as a car or house, or secure the loan.  In case of a default, the lender can retrieve his/her losses by taking possession of the asset and selling it off.  Examples of secured loans include mortgage loans and car loans.

Secured loans are associated with lower risks for the lender and a lower interest rate to the borrower.  From the lender's perspective, a default on the borrower's part will still lead to some sort of recouping of the original loan amount.  This is why a lender must underwrite these loans as a "no lose" situation for them.  From the borrower's perspective, the lower rates compared to an unsecured loan are better because that means lower payments.

52 comments:

  1. i follow you every day..nice blog

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  2. If only every loan could be like this... Nonetheless, there are people who just don't have anything to put forth as collateral.

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  3. Interesting. Never had to loan money though

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  4. I am looking into getting a loan! Thanks for this!

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  5. This is something I'm completely ignorant to. So thanks for clarifying some of this :)

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  6. Damn - and I thought school loans were a tough lot...

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  7. A good idea i guess, if you manage to do it right that is...

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  8. good info, dont knowmmuch about this

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  9. Thanks that was great information!

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  10. seems like a safe option for the bank.

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  11. hmmm interesting stuff, thanks for the info dude

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  12. Good to know about secured loans.

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  13. Thats odd, i assumed every loan required collateral! good info.

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  14. Yea, and it's those mortgage loans thats screwed up the housing right now...

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  15. Some good information here, thankyas

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  16. this is some good information for my future!

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  17. thats interesting never thought of things that way

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  18. I don't know if I said this before but I wouldn't get a loan anytime soon!

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  19. Good post! Supporting you all the way!

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  20. good knowledge to have thanks bro :)

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  21. That's one way to keep a house under lock and key. Ba Dum Tish!

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  22. so it's a deposit, I'd be too worried.

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  23. i follow you every day..nice blog

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