The Best Secured Loan

2007-03-08 10:33:40

( Financial )



Loans
A loan is a contract where one party agrees to transfer money to another in return for its future repayment with interest.

Secured Loans
A secured loan is a loan that involves property functioning as security for the repayment of the loan. When a loan is not repaid, the property will answer for the remainder of the amount due.

Examples of Secured Loans
Property given as security can be either real or personal. Real property refers to non-movables such as land, buildings, and certain objects attached to non-movables. Personal property consists of movables.
A mortgaged is a secured loan involving real property as security. A pledge involves the actual turnover of personal property in return for a loan. A chattel mortgage is another secured loan which involves personal property.

The Best Secured Loan
The best secured loan for a given situation will vary. It will also depend on whose point of view is used. From the lender’s point of view, the best secured loan will involve property that is easy to convert into money. Hence, stocks that are saleable, or highly valuable automobiles may qualify as good security. From the borrower’s point of view, the best secured loan is one that will require a fair amount of property to be used as security. You, as a borrower, do not want property that is too valuable to be used as security, because property securing a loan is always placed at risk.

Considerations
Do not allow an arbitrary value to be given to your property. If you plan to use a car or a house as collateral for a loan, be sure to have it properly appraised. If you are the lender, never accept an appraisal given by the borrower at face value. If you are the borrower, negotiate for a flexible loan which allows a grace period and advance payment of principal.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.