Secured Loans-Manage Your Loan

By: Peter Taylor

Cheapest secured loan – many lenders use this phrase in their advertisements. However, most of the offers are nothing more than a trap to lure the borrowers. The benefit the cheapest secured loan offers to the borrowers makes them blindly follow such advertisements and succumb to the temptation. The reality to which they wake up later, forces them to repent in leisure. To shop around and then choose the best offer – this basic lesson of getting a cheapest loan is learnt by such callous borrowers after paying a heavy price.

The first step in getting a cheapest secured loan is to know what you want. Before anything you do, you must enumerate your borrowing requirements clearly. The amount you want to borrow, how long would you like the repayment period to be, what amount of monthly installment are you comfortable with, would you like the loan to be from an online lender or an established bank etc., write each one of these and more on a paper. The clearer you are in your objectives the better your chances are of getting the cheapest secured loan.

Once you have listed your requirements, look for lenders that match and suit you the most. Make a list of these lenders and start visiting each one of them and note down their quotes. While visiting the lenders make sure that you present the same facts and collateral details about yourself. In this way you can get a range of quotes, which are based on the same ground realities.

The ingredients that make a secured loan cheaper or for that matter dearer are the APR, prepayment or late payment penalties, fees the lender charges for various services, the repayment period and the amount borrowed.

APR or the Annual Percentage Rate indicates the rate of interest any lender will charge on its loan. The lower the APR the better it is for the borrower. The APR rates vary a lot, as there are many lenders, competing for the service. To get the best APR the borrower must have a good credit history, and the collateral he offers for the secured loan must be of a sufficiently high value. A fixed APR is better than a floating APR if the borrower wants the cheapest secured loan.

Lenders, to safeguard their interests, impose prepayment and late payment penalties. The quest for cheapest secured loans should culminate in a lender who does not offer any such penalty or if he does so, they are the lowest one prevailing in the lending market.

Fees for judging the value of the collateral is called property valuation fees. The lender charges this since he has to engage an expert. Some lenders are honest and charge only what the expert demands, but some try to extort money in the garb of valuation fee. This is also true for the solicitor’s fee, the conveyance and ‘other office charges’. Many lenders have in-house experts who take care of these proceedings. The borrowers are advised to go for such lenders, if he is not able to find one he should look for lenders who follow transparent procedures in charging such fees so that they are not duped and get the cheapest secured loans.

Needless to say finding a cheapest secured loan involves a considerable amount of shopping. A borrower has to persistently look for the lending offers in the market and analyse them to extract the cheapest offer.

Vital to getting the cheapest secured loan is the creditworthiness of the borrower. The lenders never ever overlook this fact, no matter however high the value of your collateral is. They don’t want hassles in repayment and last thing on their minds is a legal battle with the borrower. So, it is always in the interest of the borrower to maintain his/her creditworthiness.