Home Loans
Purpose of a Secured Property Loan
(presented by www.refinance-refinance.net - mortgage lenders)
By John Mussi
With banks and credit unions becoming more selective with the funds that they loan, requiring a secured property loan is becoming the rule rather than the exception. They have been stung by so many bad loans that even someone with good credit finds it difficult to obtain a loan without putting up some kind of collateral.
Is collateral always required for a loan?
In the past, it was easy to get a personal loan if your credit was at least fair, but those days are long gone. With so many people defaulting on loans today, including those who previously had good credit, lenders are becoming less likely to approve a loan for anyone without collateral. There are exceptions, of course, but personal loans without security are reserved for the exceptional customers who have been done business with a particular lender for many years. Unless you fall into that category, you will more than likely have to enter into a secured property loan. Some lenders may make exceptions if the loan is under a certain amount, but that is a decision that will be up to the individual lender and loan officer.
In most cases, the lender wants collateral that holds value and is easy to sell in the event of a default. For that reason the collateral pledged for a secured property loan is usually real estate or a motor vehicle (car, truck, motor home). Sometimes a lender will also accept a boat, but personal property such as furniture is not usually acceptable except when it is financed at the store where it is purchased. Furniture loses its value so quickly because of everyday wear that lenders don
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