2. Does Applying for a Secured Loan Affect My Credit Score?
Yes. Any inquiry into getting any type of loan or credit card can put a small red mark on your credit score. As long as you only apply for one loan , rather than putting in several loan applications at once, that mark will be very small. But it sends up several red flags if you apply for many loans at once, as it implies you may be a financial risk. As long as you only apply for a single loan, the mark on your credit should go away quickly enough.
3. What is the Standard Interest Rate for a Secured Loan?
Much of the interest rate depends on your credit history , your collateral, etc., but most interest rates for secured loans hover around the 7% area.
4. What Can I do with my Loan?
Anything you want. Though there are some lenders that require the loan is going towards some sort of specific purpose, you can use the loan to take a vacation, pay back your credit cards, buy a car, pay for medical expenses, etc. The loan is yours to do with as you please, though of course it is always advised that you are careful with your finances and do not let spending get out of hand.
5. When I have sent in an application for a Secured Loan, am I required to take it?
Until you sign on the dotted line, you are never required to take a loan even after you submit your application. However, be advised that the more loans you apply for, the more in can affect your credit rating. The best move is to figure out which lender you believe will get you the best rate first, make srue you are going to want the loan and then feel free and apply for it. This will save you from many of the negative marks on your credit as well as a lot of extra time and effort.
6. What Will Happen if I Default On My Loan?
Though most lenders will work with you to try to get you to pay back your loan, because you put up your house as collateral, lenders are allowed to take your house if you fail to pay your loan back. That is why you should always be 100% positive that you can pay back the loan before borrowing.
7. I have Insolvency on my Credit Record. What kind of Loan Can I get?
If you have any CCJs, Insolvency or Bankruptcy on your record, you can still get a loan from some lenders. The interest rate is likely to be high, but if you can afford to pay it back the loan will still be there for you. In these instances, however, you are more likely to get a secured loan than an unsecured loan, because secured loans represent less risk to the lender and can help you overcome the insolvency on your credit record.