You have decided to push the boat out and you decide on a large purchase, which requires a loan to pay for it. And with all the advertising on TV and in newspapers for secured loans, unsecured loans etc it leaves you with a dilemma on what type of loan will be best for your purchase and wallet.

So, what are the differences and what are the pros and cons of each one.

Secured Loans

This is a loan that is secured on your property. The reason a lender will want to secure the loan on your property is that they want some form of collateral should you not be able to pay your loan back. So think of these loans in a similar way to your mortgage which is also a big loan secured against your home. As a result the lending companies will always make it clear with the following statement:

"THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT"

The main advantage of a secured loan is that you will be able to borrow larger amounts of money and also benefit from lower interest rates than unsecured loans.

As the loan is borrowed against a property it is only open to homeowners and tenants cannot apply.

Unsecured Loans

These types of loans are the complete opposite to secured loans in that you don't need to put up your house as collateral. As a result most lenders will only allow you to borrow up to £25,000 although depending on your credit history some lenders may allow you to borrow up to the same amounts as a secured loan.

The interest rates on an unsecured loan are also higher and can be as much as 10%. So the repayment amount for a £10,000 secured loan compared to a £10,000 unsecured loan can be significantly lower.

Unsecured loans are also available to Tenants, which makes the demand for them to be much higher.

So what type of loan should you try? As you can tell from the above it depends really on whether you are a homeowner or not and whether you want to take the risk of securing a loan against a property. However if you want a loan above £25,000 then you may have no option but to take out a secured loan if you are a homeowner.

Armed with this information you should make a decision based on the above factors along with whether you can make the repayments ir-regardless of what type of loan you try. Not keeping up with repayments on either type of loan will give you a bad credit rating for the future so think carefully before you apply and don't borrow any more than you can afford.

More info on your stop foreclosure information search:

Get Free Foreclosure Advice and Free Refinance Quotes
Get your free on-line foreclosure refinance quote and free advice from foreclosure mitigation specialist in minutes. Compare real offers from top national subprime and hard money lenders... more...

Buy A Cheap Repossessed House At Government Auctions
Want a good deal for your money? Then why not attend a government repossessed house auction. It is the best way of getting a house and there are a lot of choices. All you have to do is to make a study and research for possible ways to buy a cheap house, and there you have it; your dream house in ... more...

7 Tips To Purchase Cheap Repossessed Houses Through Government Auctions
If you truly want a house of your own and you certainly want to get it for a very reasonable price, then turning to government repossessed houses is a good decision. Buying repossessed homes is a thing for most people. The United States local government usually stages an auction of repossessed ... more...

How To Avoid an Investment Property Scam
To many people, taking the plunge, and investing in property for their future is a major leap of faith. Imagine how they must feel, if their investment turns out to be an investment property Scam? Is there a way out of any Investment Property Scam? The first thing to realise is that if you do feel ... more...

The Difference Between Secured and Unsecured Loans
You have decided to push the boat out and you decide on a large purchase, which requires a loan to pay for it. And with all the advertising on TV and in newspapers for secured loans, unsecured loans etc it leaves you with a dilemma on what type of loan will be best for your purchase and wallet. So, ... more...