Secured Loan

A secured loan is a loan where the borrower (you) offers a collateral (asset, your home) to which the lender has access in the event of the borrower (you) fails to make the loan repayments. Your home would be considered security and, therefore, can be claimed by the lender if default (unable to make the repayments on your loan) occurs. Secured loans are as the name suggests, secured on your home.

Secured loans range between from $3,000 to $100,000, depending upon the lender and the loan product, with repayment terms between 3 and 30 years, however terms of 15, 20 and 25 years are most common. Secured loans are secured by a charge against your home, but can be for any legitimate purpose such as a new vehicle, home improvements, or a vacation, etc. For most lenders is doesn't matter what you want the loan for. However, not all lenders offer loans for all purposes.

The amount you can borrow will depend on the following:
1. Your house value and the amount of mortgage you have already.
2. Your current outgoings including existing credit. (If you are clearing these then they do not count).
3. Your household's income.
4. Any adverse credit information registered on your credit file.

These factors will determine the rate of interest that can be offered to you. Loan companies arrange these loans for clients from all walks of life and circumstances. Their only concern is to help. All loans are secured on property. Your home is at risk if you do not keep up the repayments on a mortgage or loan secured on it.

There are some benefits to a secured loan: Secured loans are easier to approve, they may take longer to process, but usually interest rates are cheaper. Lenders can give cheaper interest rates due to the fact that your home is their security which makes the loan less of a risk.

Loan companies are less likely to act "immediately and drastically" on payment defaults, should you not be able to keep up repayments on your loan. You will be given more time to recover from this than unsecured loan holders. However, it is by no means a guarantee and you should make 100% sure that you can keep up all loan repayments before you make your application, because, if you are unable to make the repayments on your loan you will "sooner or later" lose your home.

Federal Laws
Major laws that govern financial institutions and protect individuals in their financial dealings

Organizations

Fannie Mae
Freddie Mac
Ginnie Mae
Nellie Mae
Sallie Mae

Consumer Info

Credit Bureau
Credit Report
Directory of Federal Agencies
Federal Trade Commission (FTC)
Identity Theft
Predatory Lending
Repair Your Bad Credit
Truth in Lending Act
Borrowers Beware

Miscellaneous

Private Mortgage Insurance (PMI)
Prepayment Penalty

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