Others will avoid this type of loan thinking they will be attached for a long period of time or the interest rate will be crippling.
Well, I'm here to tell you that these loans come with a long string of short-term and long-term benefits. Most of the concerns mentioned above are not based secured loans score as heavily on other types of loans. Here is a list of some key advantages.
Initial repayment holiday
Many come from loans with a grace initial. This means you do not pay the payments for a defined period which may amount to a whole 5 months! Think about it - you'll have enough to get and more time to consolidate, regroup and plan your refund!
The fixed interest rate
Your interest rate is guaranteed for a fixed number of years (up to 5 years). This allows you to the vagaries of economic and interest rate decisions by central banks. You also know how much you will pay each month, so you can plan ahead.
Balloon repayments
Repay a portion of the principal sum in advance, beyond the usual monthly payment. This is useful when we have excess cash in your hands, you can use to align a portion of your loan. The interest goes down and the payment period is reduced as the principal debtor decreases.
Insurance Coverage
Obtain coverage for accidents, illness and unemployment. If you are involved in one of these situations, the insurance company make the loan payments on your behalf.
The insurance guarantees that you or your family will not face any hardships, in case something untoward happens. Death is also covered by these insurance policies.
Also, if you opted for the policy coverage to pay, and if you keep all your payments and have made no claims, then some companies pay back all the premiums you paid on the policy. This reimbursement is made at the end of the term of the hedging policy for reimbursement.
Amount of additional loan
Some lenders will allow you to borrow up to 125% of the value of your property. The extra money may prove useful if you see an investment opportunity in gold and want to strike when the iron is still hot. It is also an excellent alternative to remortgage. Try to find a mortgage to 125%, it simply does not exist.
Prepayment
A number of lenders will give you a discount on your interest if you repay the loan ahead of schedule. Interest saved is the interest earned, and we always get a pleasant surprise when he / she landed a deal!
This in short are the main benefits of a secured loan. Do not forget to deal with a loan broker chip for all your borrowing needs. Good luck.
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