Other Free Encyclopedias » Online Encyclopedia » Encyclopedia - Featured Articles » Featured Articles: American Idols Tickets - How to Score American Idols Tickets (and How Not To!) - Where to Find American Idol Tickets to Meet Singles Free - How to Meet Singles Free

Loan Secured Loan - How to Obtain a Loan: Secured Loan

collateral lender documents money

With the economy in its current state, it is increasingly more difficult to obtain a loan. There are, however, still options out there. It is possible to obtain a loan secured loan.

Secured loans are available through banks and other specialized financial institutions, often included online lenders. A loan secured loan is defined as a loan in which a borrower offers collateral to the lender in exchange for a loan, often at a lowered interest rate. Secured loans often require proof of monthly income and ownership of a valuable asset you can use for collateral.

The first step to obtaining a secured loan is determining how much money will need to borrow. Keep in mind that you will have to produce collateral of the same value in the event that you default on the loan. Good examples of collateral are a car, a boat or real estate investments. Remember to only borrow what you need; you will be paying interest on this loan and you don’t want to be paying interest on money you never needed to begin with.

After you have determined the amount of money you wish to borrow, you will need to make an appointment with your banker or loan officer. It is recommended that you go to the same bank that hosts your checking and savings accounts. A bank that has been dealing with you for some time is more apt to appreciate your business and offer you a better interest rate. However, if you are not pleased with the terms your bank offers you, do not be afraid to seek out a second opinion at a financial institution to which you do not belong.

You will want to bring proof of income, collateral, last year’s tax return, a social security card and state issued ID with you to your appointment. Some loan officers may require you to provide proof of residence, such as a utility bill or lease. If you anticipate needing a co-signer for your secured loan, bring them as well. They will need the same amount of documentation as you.

After you have found and been approved for a loan, negotiate the interest rate down. Since you are offering collateral in exchange for a loan, you are in a position of power and may demand better terms from the lender. It is also possible to secure a lower interest rate if you agree to have monthly payments to be directly debited from your checking or savings account every month.

When you sign your loan documents, you will also be signing over your collateral. Before signing away your personal property or other possessions for a loan, be sure to fully review the loan documents. You want to be sure that everything on these documents as is expected and that it coincides with your previous oral agreement with the loan officer. Do not sign any documents unless they say everything as it should be. Do not take a lender’s word that they will change the document after you sign it. Any loan documents signed by you are legally binding, no matter what the terms in them.

Some tips to keep in mind when obtaining a loan secure loan are:

A lender may allow you to use the item you are purchasing with the loan money as the collateral for the loan. For example, if you are purchasing a vehicle, the finance company may allow you to use your new car as collateral for the vehicle loan. However, keep in mind that if you default on the loan, this will put you in a very precarious and undesirable financial situation.

It is possible to use stocks, bonds or other cash investments as collateral, depending on the policies of a particular lender. This is beneficial to you because your investments continue to earn interest while permitting the bank or lender to hold them as collateral at the same time. This may be one of the safest ways to secure a loan.

Always remember, late or missed payments on a secured loan will lower your credit score as well as cause you to lose your collateral to the lender. As with any loan, think very carefully about a secured loan before actually taking one out.

Loans For Auto - How People Can Obtain Loans for Auto Purchases [next] [back] Bad Credit Cars - Loans for Bad Credit Cars : Making the Best Out of a Bad Situation - What are Bad Credit Car Loans?, Get Your Credit Score, Shop Around

User Comments

Your email address will be altered so spam harvesting bots can't read it easily.
Hide my email completely instead?

Cancel or