Sunday, December 16, 2012

Secured Loans, What Are The Legal Implications

Secured loans are all around us. Chances are that you may have even taken out a secured loan in the past and may not have even realized it. A secured loan is a loan in which you place up collateral to secure the loan. These loans are seen every day such as the purchase of a new car or even a house. Just because you have not physically put up collateral for a secured loan does not mean it isn't one.

When you purchase a car, if you do not pay the loan repayments then the loan company can send someone out to reposes it. Just because you never handed them the car does not mean that the car itself cannot secure a loan. Granted you may not be able to use a car as collateral on the purchase of something else that still does not make much of a difference.

What about when you purchase a home? When you purchase a home if you miss too many payments the lender can foreclose on the home and take it away from you. This home loan is known as a mortgage and a mortgage is a secured loan. Remember when you signed all of the paperwork for the home and the lender's representative was there with a check? Well when you think back, you may have realized that you did not actually sign the deed alone, but rather signed it with the lender in which case you were securing the loan for the home even before you actually had the loan. This is still a secured loan and they are in fact the most common loan out there.

From cars to homes secured loans are everywhere and they come in many different styles, sizes and shapes to choose from. It is important to remember though that before you choose a secured loan that you take the time to research all the choices so that you can make sure that you are choosing the right one that will work for you and not simply because it is the cheapest for you right now. The last thing you want to do is to sign a variable secured loan and end up with higher payments down the road that you may not even be able to afford. Take your time and make sure that you make well-informed decision regarding your secured loans purchase what every they may be.

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