Home - Mortgage Loans | Personal Loans | Bad Debt Loans | Foreclosure Loans
Apply for a Loan | Best Auto Loans | Best Bad Credit Auto Loans | Best Bad Credit Loans | Best Bill Consolidation Loans | Best Cash Advance Loans | Best Credit Cards | Best Credit Repair Tips | Best Debt Consolidation Loans | Best Free Credit Reporting Tips | Best Home Equity Loans | Best Mortgage Loans | Best Pay Day Loans | Best Personal Loans | Best Products on the Internet | Best Unsecured Loans
Great Financial Advice
Apply for a Loan
Latest Financial News
Rate Lock Advisory
Best Products
Join Our Mailing List
Contact Us
Loan Articles Index
Auto Loans
Bad Credit Auto Loans
Bad Credit Loans
Bill Consolidation Loans
Cash Advance Loans
Credit Cards
Credit Repair Tips
Debt Consolidation Loans
Debt Reduction Loans
Foreclosure Loans
Free Credit Reporting Tips
High Risk Loans
Home Equity Loans
Home Loans
Lawsuit Loans
Mortgage Loans
Pay Day Loans
Personal Loans
Products on the Internet
Real Estate Services
UK loans
Unsecured Loans
Loan Article Index
Loan Articles A-G
Loan Articles H-Q
Loan Articles R-Z
Mortgage Calculators
Mortgage Calculator
Mortgage Amortization Calculator
Rent vs. Buy Calculator
How Much Can I Afford Calculator
Auto Payment Calculator
Click here to Sign up for Email and Newsletter

 

redhotloantips fat loss


Using the Right Collateral for a Loan

Written by: John Mussi

Loans can be expensive, and if you're not careful you might find yourself paying much more in interest than you have to. Of course, there are a lot of factors that are used to determine your interest rate... your credit score, national interest rates, and some of these other factors that are for the most part beyond your control.

However, there is one factor that not only can have a significant effect on the amount of interest that you pay but is also directly under your control.

By taking the time to choose the right collateral to secure your loan, you can save both time and money while repaying the loan and help to make sure that you get the loan in the first place.

Defining Collateral

Before you can choose the right collateral to secure your loan, it's important that you know exactly what collateral is and what it is used for. Collateral is an object of value that is used to guarantee repayment of a secured loan. The item used as collateral provides security to the lender, letting them know that they'll get their money back whether or not you're able to satisfactorily repay the loan... if you fail to make the proper payments, then the lender has a legal claim to the property used as collateral and can take possession of it with the intent to sell it.

The repossession process does create additional cost and labor for the lender, however, and is generally used only as a last resort after other collection attempts have been attempted and failed.

Deciding on the Type of Loan

The type of loan that you're applying for can have a major effect on the type of collateral that you use. Certain types of loans require specific collateral, and others use the item purchased with the loan itself as the collateral. Take the time to consider what the loan is going to be used for and how much money you're going to need to borrow. If you're making a high-value purchase, such as a house or new vehicle, you'll probably be better off using a specialized finance or mortgage loan that uses the item as the collateral.

If you're consolidating debt or making home improvements that will have a significant cost, you might want to think about applying for a home equity loan.

If you're going to apply for another type of loan, then you need to start thinking about what you have available that you can use as collateral.

Considering Available Collateral

Most items of value can be used as collateral to secure a loan, but not all of them are appropriate for most loans. Some lenders require that you use certain types of collateral, but even for those that don't you might find that certain types of collateral aren't going to get you a good interest rate for your loan. Take the time to consider the various items that you could possibly use as collateral, keeping in mind that it needs to be an item of value that has at least a somewhat accessible market for resale.

Remember that property with a higher value tends to make better collateral than lesser-valued items, which is one of the reasons that houses, vehicles, precious metals, and home equity are commonly used as collateral.

Carefully evaluate the potential collateral that you have available before making your decision, and remember that it's perfectly acceptable to request loan rate quotes from lenders before choosing one loan or piece of collateral over the others.

You may freely reprint this article provided the following author's biography (including the live URL link) remains intact:

About the author:

John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the www.directonlineloans. co.uk website.


Other Related Articles:

Finding a Home Loan with Bad Credit
Finding a home loan that is affordable when you have bed credit can seem nearly impossible and can be very frustrating. However, there are lenders out there who will approve your home loan regardless of your credit history. Yes, there will be some...read more

Getting a Debt Consolidation Loan
Should you find yourself getting in over your head with debt, you might be a prime candidate for a debt consolidation loan. These loans are designed for those with a heavy burden of debt, and are used to consolidate a large number of debts into a...read more

Bad Credit Car Loans Have Their Advantages
Are you one of the many people who have credit problems? Poor credit ratings and bad credit is more common than you think. Bad credit is not something to be ashamed of as it can happen to all of us at some time in our life. The good news is that...read more


Return to Home

468x60

Best Auto Loans, Best Bad Credit Auto Loans, Best Bad Credit Loans, Best Bill Consolidation Loans, Best Cash Advance Loans, Best Credit Cards, Best Credit Repair Tips, Best Debt Consolidation Loans, Best Debt Reduction Loans, Best Foreclosure Loans, Best Free Credit Reporting Tips, Best High Risk Loans, Best Home Equity Loans, Best Home Loans, Best Lawsuit Loans, Best Mortgage Loans, Best Pay Day Loans, Best Personal Loans, Best Products on the Internet, Best Real Estate Services, Best UK loans, Best Unsecured Loans
Subscribe to Mailing List | Private Policy | Unsubscribe | Site Map