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Secured loans can have a number of pros and cons, the main ones being they can offer large sums of money for low rates but they also carry the risk of being secured against an asset.
Secured loans are usually provided through banks, building societies and brokers.
They are usually over a set amount of time and the interest rate can be varied or fixed. Some of your biggest purchases may be financed by a secured loan such as your mortgage or your car.
When considering a secured loan it is important to remember the amount you borrow is secured, for example your mortgage (secured loan) will be secured against your property.
If you fail to make repayments on your secured loan your home can be repossessed and sold to recover the money you still owe. Even if the amount you owe seems small in comparison to your property value.
With any secured loan it is vital you borrow only what you can repay and with any agreement ensure you have read and understood the terms of which you will be bound by. Source:
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