Secured loans: to help you tide over those hard times
Written by: Nidhi Sachdeva
Picture this: you have a nice, stable job that pays you enough
to live a comfortable life and also pays for your mortgage and
other loans. Suddenly, you are relieved of your services. Now,
you are out of work and have a shelf full of bills to pay. What
do you do?
Losing one's job is a very plausible event. It could happen due
to a variety of reasons ranging from a small tiff with your boss
to an ongoing lay off in your area of work. The bottom line is
that you are out of job and chances are that it will continue
for the next few months.
You know that your creditors will be pounding on your door very
soon. So, what do you do? Don't worry; there is a way out. The
name of the solution is: secured loans
for the unemployed.
While unemployment is such a black mark that most lenders would
avoid lending to a person who is out of work. However, there is
a section of lenders that will be more than ready to advance you
money to help you tide over this difficult situation. But they
won't do it for nothing! As a compensation for the risk they are
taking in lending to a jobless person, they will demand security.
While home is one of the most common forms of collateral, some
lenders may accept other kinds including bonds, shares,
jewellery and cars. In case you do not have a security to offer
then you may avail an unsecured loan. But such a loan will come
with the liability of a very high rate of interest.
In case of secured loans , the amount of loan that you
may borrow will depend on the equity in your home. Ideally, you
are able to borrow about 80% of your home's equity, but in your
special situation where you are rendered unemployed, you may be
allowed to borrow 70% of the equity in your home.
Before a secured loan is advanced to an individual, he
is asked to realistically ascertain the period for which his
unemployment will continue. If it is expected to last long, then
a borrowing a secured loan for a longer period is suggested.
The rate on your secured loan will be determined by a
number of factors including your job history, your previous
credit record and of course the period for which you are
predicted to stay jobless.
While you may face some disappointment in your loan approval
from certain lenders, don't lose heart. Instead, keep trying;
there are a lot of lenders out there who will be more than
willing to lend you money.
About the author:
The author is a business writer specializing in finance and
credit products and has written authoritative articles on the
finance industry. He has done his masters in Business
Administration and is currently assisting Shakespeare Finance as
a finance specialist. for more information visit our site
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