How Best to Compare Secured Loans

If you're looking for a secured loan, there are likely to be a range of factors you may want to take into account in order to ensure that you get the best deal. It's possible of course to scour the newspapers, try to spot advertisements on the television or even look in the windows of the high street branches. However, it could be a much quicker and easier option to compare secured loans by visiting a loan comparison website.

If you have already made the decision to look for a secured loan, of course, you will be aware of the some of the advantages of borrowing against some form of security. For most people with a mortgage, the most substantial and readily accessible form of security they have to offer is the equity they hold in their home. If the home is going to be pledged as security, of course, certain confidence is needed that there will be no defaulting on the loan repayments, or the home will be at risk of repossession.

Some of the factors to be taken into account in order to compare secured loans will have to do with the size of the loan being sought, the interest rate attached to the loan, the repayment term and the flexibility with which repayments can be varied if personal circumstances change.

How much?

Arranging a secured loan will generally give the borrower an opportunity to borrow more rather than less. Indeed, given the administrative costs in setting up the loan, it is usual to reserve the process for those occasions when a larger rather than smaller loan is being sought. Since the lender's confidence in the loan being repaid will depend on the value of the security offered, the greater the homeowner's equity in his home the larger the loan that is likely to be available.

Interest rates

This can be perhaps the single most critical factor when comparing secured loans. Despite the relative famine of funds available for lending in the present economic climate, it's still a competitive market, with the most attractive rates of interest available to those prepared to search the most diligently. Although the advertised headline rates will naturally be used to attract borrowers' interest, it should be remembered that individual personal circumstances, such as past credit history, will most likely influence the particular rate of interest likely to be offered.

Repayment term

A secured loan is also likely to offer greater flexibility with respect to the repayment time. Generally speaking, of course, the longer the repayment term, the lower the annual rate of interest charged, but the more you will end up paying in interest over the whole life of the loan.

Flexibility

In order to best compare secured loans, it is probably a good idea to take into account whether any penalties will be incurred by repaying the balance earlier than the initially agreed term. The longer the term of the loan, of course, the more likely your circumstances are going to change. If you think this is likely to be the case, and that you could be in a position to repay the loan early, it would be helpful to know that such a decision is not going to incur unduly punitive charges.