Other than the common benefits, boundless other advantages lie with this kind of a loan. Simply defined, this loan is seen when the borrower obtains money from the lender and promises to pay it back within a usually specified and agreed upon time.
To assure the lender, the cash is given to the lender against a particular item of value to the borrower and usually has a high commercial value. In as much as all loans have diverse benefits, we shall consider secured loans and the benefits involved.
Low Interest Rates
This is the very first observable benefit of this loan. Second only to mortgages, these loans charge the lowest amount of interest in the individual finance section. A secured loan can have an interest rate as low as 6Usually, the rate advertised is not the one the borrower pays. The lenders explanation is that it is the security loan value that determines the loan amount. The lender assess the security, for example a house, and determines how much he could make after selling it, should the borrower fail to pay back the money as promised. However, it never comes to this level as the lender and borrower agree upon the installments given for repaying the loan. In most cases, the borrower negotiates for a repayment period that is comfortable to his earning or income.
Large Amounts Available
The borrower can take as much as he needs depending on the value of the security. The more the value of the security, the more the lender will be willing to loan out, as it is easily recoverable in case of default. In cases of loans that are unsecured, there is the fear of non-payment, but the fear is not present in secure loans. In some cases, the lender can decide to just hold the security title until the entire amount has been repaid. This is very flexible.
Interestingly, secure loans are more readily available than other financial items. It would be a mistake to discuss the benefits and not mention how easy they are to come by. These loans entice the lender with the allure of chance to make extra cash, whether the loan is repaid or not. In the case of full repayment, the lender earns extra money through the interest charged. In cases where the borrower repays only part of the loan, the borrower makes money through both the interest repaid with each installment and the amount acquired should the borrower sell the security to set off any balance. This makes them easy to come by.