What You Need To Apply For Secured Loans

If an individual wants to go on a very expensive world cruise, get married in a oop of the range venue, etc. they will need to obtain extra money from some where, and unless they have a very fat wallet, they will require to borrow, which means obtaining a loan of some sort.

There are number of different loans, but they broadly divide into two types which are namely unsecured or personal loans and secured loans.

Unsecured or personal loans are in fact self explanatory, and what they are is in their very name, that is they are granted to the individual and need no type of security. Being unsecured, absolutely everyone is eligible to apply whether they own their their home, or are renting from a council, housing association or whatever or whether they are homeowners.

Theoretically everyone can apply for an unsecured or personal loan but it is only those who are property owners who can apply for secured loans as they are the only ones with a home on which the loan can be secured.

The fact that secured loans are also available to homeowners is the reason why they have the other name of homeowner loans.

Having established that the first criteria for obtaining a secured loan is that the applicant must be a homeowner, the next important factor is the equity on a property.

The meaning of equity is the balance that remains when you deduct the mortgage on the property from its value.

If a property is worth 200,0000, and the mortgage is the same, there is no equity, and no secured loan would be available.

A few days ago the equity was raised to 75% for self employed people and 85% for employed applicants by one established secured loan lender. Therefore it is easier than ever to be granted a cheap loan for almost any purpose including using them as consolidation loans.

The availability of 100% plans disappeared at the start of the recession and the best LTV for these all purpose homeowner loans is 80% for employed applicants and 70% for those who are self employed.

On a property with a value of 250,000 and a mortgage of 150,000, the equity would be 100,000.

Therefore the first two important aspects for obtaining these low cost loans is to be a homeowner and to have sufficient equity, which can be used for almost anything including debt consolidation.

Learn more about secured loans. Stop by Champion Finance’s site where you can find out all about debt advice and what it can do for you.