How to Get a Secured Bad Credit Loan

If you need money now, but have been repeatedly turned down for
unsecured personal loans, you may still be able to get the cash
you need with a secured bad credit loan. A secured loan is one
in which you offer something as 'collateral' to guarantee your
repayment of the loan. If you don't repay the loan within a
specified period of time, the lender has the right to take
possession of the collateral and sell it to recover their money.
Secured loans are designed to help those with poor or no credit
get the loans that they need. Additionally, because the security
deposit (another name for collateral) guarantees that your
lender will be able to recover his money - most lenders will
extend loans with lower interest rates than the same loan with
no security.
The most common types of collateral are real estate or
automobiles, though it can be anything that is equal or greater
value than the amount that you borrow. In most cases, you don't
give up physical possession of your car or home - you can go on
driving it or living in it as long as you continue making your
payments on the loan. Instead, you sign a note that gives the
lender a legal right to the title or the deed to your car or
home. If you default on the loan - don't make the payments that
you've agree to make - then the lending agency can take
possession of your property. If it's an automobile, it's
commonly called repossession. For real estate, it's called a
foreclosure. In either case, the lending agency has the right to
sell your property in order to recover their loan.
While autos and real estate are the most common types of
collateral, some lenders will lend money with jewelry, coins or
other collectibles or other types of vehicles. Most often, if
you secure a loan with an item like jewelry or collectibles, the
lending agency will take possession of the item until the loan
is repaid.
How to find a secured loan if you have bad credit
Many lenders - banks in particular - don't deal in any sort of
secured loan other than second mortgages. Other institutions
deal almost exclusively in secured loans. Finance companies that
deal in secured loans can be found in your phone book,
newspaper, and increasingly, online. Shop around and compare
interest rates on loans and the terms of repayment with several
different lenders. You'll find many internet sites that let you
request a loan rate quote from multiple lenders at once.
Once you've submitted a request for a loan quote, you'll be
contacted by representatives from several companies and can get
a good idea of what each can offer you in terms of interest and
other finance charges and fees. Choose the best one for your
needs, and apply for the loan. It's that easy.


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