If there occurs a situation of financial emergency and one requires a large sum of money one can apply for a loan from financial institutions. If he or she has been turned down for unsecured loans he or she can still apply for secured loans in spite of having a bad credit. Secured bad credit loan works with the principle that the borrower will have to keep a something as security on the basis of which the financial institution will grant him or her any loan. He or she can mortgage their asset. Secured loan requires the borrower to keep something as collateral, so that if he or she fails to repay the loaned money back they can legally usurp the security asset kept as a mortgage. Secured loans are crafted in a manner to help those with a bad credit statement. Secured loans ask for a security deposit or collateral because this ensures that the borrower will be repaying his debt in due course of time. Secured bad credit loans are offered at very low rate of interest.
Most of the times the collateral or security deposit that is kept with the lender comprise of either real estate or automobiles, or in fact anything that is almost equal or more than the value of money loaned. One does not have to give physical possession of these assets, one can still live in their houses and drive their cars, but one will have to keep on paying the monthly installment of the loan. If the borrower defaults on the loan and is unable to pay the amount promised to be repaid then the financial institution is legally bound to take possession of the security deposits. In case of an automobile it is called repossession. In case of real estate it is called foreclosure. In either of the cases the financial institution is legally bound to take possession of the collateral offered in case the borrower defaults his repayment.
In most cases real estate and automobiles serve as collateral but sometimes borrowers also mortgages jewelry or collectibles. In case of jewelry and collectibles the financial institution takes possession of the items until the loan is repaid.
How does One Find a Secured Loan in Case he or she has a Bad Credit Statement?
Most of the banks do not deal with any type of secured loan other than secured mortgages. However other financial institutions deal completely with secured loans. One must ensure about the existence of the company that offers the secured loan at least find out the physical address of the office and also compare the rates of interest and the time and method of repayment with different lenders. It is a very hassle free and easy process and loans are approved almost instantly.
Author’s Bio:
Alice Aires is a master in the finance field with expertise in handling Bad Credit Loans application. Aside from that, he also masters various financial approaches like badcreditloans.com.au and is a major consultant in various firms and companies locally and all over the country.
