Is a secured loan right for you?
It is important to determine whether any type of financial product is right for you before you apply. When it comes to secured personal loans, here are some points to keep in mind:
- You can manage your repayments. If you find yourself unable to repay your secured loan the lender is able to repossess the asset you offered as collateral to cover its losses.
- You have an asset to guarantee or are looking to buy one. Lenders will require you to either be looking to buy an asset with your loan (such as a car or home renovations) or you already have an asset that meets its criteria.
- You meet the requirements set by the lender. Lenders will have requirements for the guaranteed asset, such as its age or value. For example, if you are using a vehicle as security, it will need to be under a certain age; or if you are using a term deposit you will need to have a certain amount in the account.