Saving Secured Loans

Diposting oleh Adi Susanto | Thursday, December 25, 2008 | | 13 komentar »

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. The debt is thus secured against the collateral — in the event that the borrower defaults, the creditor takes possession of the asset used as collateral and may sell it to satisfy the debt by regaining the amount originally lent to the borrower. From the creditor's perspective this is a category of debt in which a lender has been granted a portion of the bundle of rights to specified property. The opposite of secured debt/loan is unsecured debt, which is not connected to any specific piece of property and instead the creditor may satisfy the debt against the borrower rather than just the borrower's collateral.

One of the more popular type of secured loan which is typically available only at a bank or credit union is the savings secured loan. In this type of loan, the borrower of the secured loan has a savings account with the creditor. The money in this account is used as collateral to secure a loan equal to the amount pledged.

This money will be frozen in the account but continues to earn interest, as the saving secured loan is repaid the secured portion of the savings account is freed. This has advantages for both the creditor and the borrower, as if the borrower defaults on the loan the collateral is already in the creditor’s possession so there is a little risk to the creditor. So generally, the creditor usually offers a much lower interest rate. The disadvantage of this type of loan is that it is limited by the available fund in the savings account.

Two other forms of secured loans online:

A mortgage loan is a secured loan in which the collateral is property.
A nonrecourse loan is a secured loan where the collateral is the only security or claim the creditor has against the borrower, and the creditor has no further recourse against the borrower for any deficiency remaining after foreclosure against the property.
Looking for more information on online secured loans , take your time to study the necessary secured loans online before you make any selection as terms will vary between loan companies.

13 komentar

  1. Adi Susanto // December 29, 2008 at 5:10 PM  

    ghjh

  2. bank expert says // April 12, 2009 at 1:55 PM  

    Thanx to share. I think it is informative. I have some idea about it:
    1.Look for a loan that won't cause you to be penalized if you choose to pay off your loan balance early.
    2.Be sure to read the term and condition before you sign any loan document.
    3.Very first offer must avoid.
    5.Take your loan from a trusted one.
    6.Take the best interest rate, best loan terms, and best overall secured loan deal.

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  11. Anonymous // March 24, 2012 at 12:39 PM  

    Hi, thanks for the information! In regards to: "This money will be frozen in the account but continues to earn interest, as the saving secured loan is repaid the secured portion of the savings account is freed. This has advantages for both the creditor and the borrower, as if the borrower defaults on the loan the collateral is already in the creditor’s possession so there is a little risk to the creditor.": While it may be advantageous to the creditor, what if the collateral is rapidly depreciating in value? For example, a sport car is an item which immediately starts depreciating once it is driven off the car dealer's lot. In that case, certainly it won't be advantageous for the creditor to secure this type of create even if it is guaranteed to be in creditor's possession?

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