With bank lending thinning and interest rates rising, a new type of credit has been in high demand: the secured loan.
Not widely practiced in the market but encouraged by financial institutions in times of economic crisis, this type of credit offers more attractive interest rates and has been the choice of small business loans when it comes to paying off. Doubts.
You can use this type of credit to pay off debts, undertake or buy a second property. If your goal is to fund overseas courses or children’s studies, look at other forms of borrowing where the risk is lower.
How does the secured loan work?
This is a kind of loan in which your own property is given as a guaranteed debt. From the moment you sign this type of credit agreement Of course, it will be transferring the property to the lending financial institution, and the case of the institution can take over its property.
It is allowed to finance up to 70% of the value of the non-movable valuation. The terms may vary from 10 to 30 years with interest of up to 2%. Interest rates, appraisal rates, and timings vary by bank, so research well before you decide. And remember to “save a value” for your card costs.
What are the benefits?
In this mode, you find low interest rates, longer financings and longer amounts, and fixed installments until the end of the contract. It is more advantageous to exchange them for a single question. This way you clear your name and are more likely to reorganize.
The variety of institutions that make this type of loan available is large and banks have been committed to meeting the growing demand. The best thing about credit analysis is that the release of money into the account can take up to 48 hours.
On top of that, the payments are very flexible: you can pay off the installments in advance, or if you can repay the balance before the deadline.
What are the risks?
If there is a delay in the installments for more than 1 month, your property risks alienation, so the bank creditor may request possession of the property in a debit card and take it to auction without having to go to court.
If the funded amount is greater than what is needed for your goal, you may end up borrowing longer and further compromising your income.
In the event of default, you risk losing the property. The fact that it is self-serving to be one’s sole good, when done voluntarily and specifically for that purpose, is a legal operation.
Now that you know if a real estate loan is worth it, review your spending and plan for the installments not to compromise your monthly income. If you are late on some installments, “contact the bank” immediately and try to renegotiate them, so you avoid major concerns.
If you do not have a property, another good way to get low interest rates is the online loan. Have you heard?
I hope our article has helped you.If you want to share your knowledge on the subject or have any questions, leave your comment on our page! Are you thinking of getting a home equity loan?