We have heard of all kinds of loans:
There are loans of every type and category and then there are secured loans!
What are secured loans? A secured loan is one where the bank or the institution granting the credit/loan requires the borrower to furnish a collateral or any fixed asset of the value of the loan or that which iOS slightly higher.
The collateral could be anything:
- A house
- A car
- Any other fixed asset, anything in short.
What purpose this security or collateral serves is that it provides the bank or the craft giving the institution the warranty for them paying the sum of money to you. It is a kind of guarantee or surety to them. they know that you cannot abscond with the money because your collateral is in their possession and in case you default or you swerve from the rules and regulations, they have the Ability to cash in on the security or such collateral and to recover the amount is due to them by you.
Here is a list of advantages of secured loans:
- A huge amount of loan can be sanctioned:
Furnishing the collateral along with the request of the loan gives the banker a positive sign that his money is safe. He is more than ready to allow the customer to pick up a loan up to the amount to the property and in some cases exponentially higher.
- Longer payment terms can be negotiated:
Because the collateral is already furnished, the banker is more relaxed and in allowing a longer period of repayment. This amounts to lesser equal monthly installments at a fixed monthly interest rate loan. It is a win for both eh banker and his customer.
- Approval is easy-peasy:
With collateral, there is no doubt that getting a loan sanctioned is like saying ABC.
There is fine print to read in case you are already making up your mind. Make sure to read https://www.lainaa-heti.fi/kiinteakorkoinen-laina/ to get a better idea on it!