What is a secured loan?
We certainly don't live in a world that waits for us to save up our money before we can pay for something. It used to be that way, but not any more. Costs are have risen higher than income in many cases, making loans and credit a necessary part of life. If you find that you need a loan, a secured loan is a way to increase the amount that you can borrow and often enable you to borrow it at a better rate.
What is a secured loan?
An unsecured loan is a loan of money that is simply leant to you based on your credit rating or on your word. If you were to default this loan, you would be expected to pay it and your name would probably be submitted to a collections agency to make the collection or you might be taken to small claims court. However, that is all the lender can do.
If you need to borrow a greater amount of money or want to borrow money at a better rate, borrowing against some kind of equity is the way to go. Perhaps the equity is your home, or some other kind of possession, like valuables, stocks, or your car.
How is it better than an unsecured loan?
Borrowing against this equity tells the lending agency that if you cannot make your payments, they can take your equity as an alternative form of payment.
Lending agencies like this because it means that they have some security on the money you owe, in case you default on your payments. At the same though, coming to you to take your home away from you is difficult to do for them, since they are bankers and not realtors. They may be more willing to renegotiate payment terms if that is what you need to do.
So, rather than spend an arm and a leg on unsecured loans, if you need to borrow money, consider getting a secured loan. You'll get the chance to borrow more money, at a lower rate, and with the possibility of better payment terms.
About The Author:
Jeff Lakie is the founder of Secured Loan Quotes a website providing information on Secured Loans
Critical illness insurance and life insurance cover for better and for worse.
There are three main types of insurance cover you can buy to protect yourself and your family: life insurance, private medical insurance and critical illness insurance. If you want your financial health to be completely bionic then you could choose all three types of insurance, but if your family finances are more restricted, it might be better to insure yourself with critical illness insurance and life insurance. Critical illness insurance should not be confused with private medical insurance or even income protection insurance and it's important that you do a full evaluation of your needs before you pursue the different insurance options.
The purpose of critical illness cover (CIC) is to fill a gap that is left by traditional life insurance policies, which will only provide a pay-out on the death of the policy holder. CIC provides a tax free lump sum following the diagnosis of one of a number of life-threatening illnesses or certain types of surgery. The sorts of situations usually covered include the diagnosis of cancer, a stroke, a heart attack, the loss of a limb and many other serious disabilities.
Critical illness insurance policies are typically sold to cover mortgage repayments and are often sold alongside a life insurance package to ensure the borrower can repay the loan in all circumstances. It is worth noting that if a combined life insurance and critical illness cover package is taken out, then it would not be unusual for an insurer to pay out for only one of the events. Therefore if the policy holder suffers a critical illness and then dies at a later date, there will only be one pay-out – for the initial illness. It is essential whenever you take out a policy that you make sure it covers all of your needs and those of your family. Don't estimate how much cover you may actually need. You will additionally need to consider the period for which you want critical illness cover, such as a set number of years to cover the mortgage or no fixed period at all, so you can maintain the policy as long as you need it.
The critical illness insurance market has come under increasing pressure in recent years, as the number of claims has soared, survival rates increased and medical science has made it far easier to detect serious conditions much earlier. These factors have prompted some serious questions about the viability of critical illness cover, particularly guaranteed products.
For the majority of people, the most important benefit of critical illness insurance is to protect their mortgage and most mortgage protection policies allow you to include life insurance and critical illness cover. If you already have life insurance in place, you can buy an additional, separate critical illness insurance policy.
Resources:
The Association of British Insurers
Consumer Insurance Comparison Research
Insurance Guide
About Rachel
Rachel writes for the personal finance blog Cashzilla – personalfinanosaurus – licensed to roar.
Rachel spends her not-so-free time researching and writing personal finance articles, but she gets through it with Smarties and Fruit Pastilles.
To read more about Rachel and Cashzilla visit Cashzilla - personalfinanosaurus
Disclaimer:
I am not a financial expert. Read my article, but do your own research. No lawsuits here please.
Tips for avoiding foreclosure
Foreclosure can be a devastating change in your life. If you miss your mortgage payments, you could be in danger of foreclosure: you'll have to move out of the home you have worked so hard to own.
Here are some ways that you can avoid foreclosure.
" Set up your mortgage payment on direct deposit from your bank account and arrange an overdraft, just in case you have a tight month.
" An emergency account is a good idea, but not very practical for most people. The money they save in that account is often better spent on the necessities of life. Set up an emergency account but without any of your own money; do this by arranging a personal line of credit or borrowing account which will cost you very little if you don't use it, but if you need it it's there and can be substantial.
" Maintain a good credit rating. If you miss a payment or two and someone is considering bringing a foreclosure judgment against you, they may be less likely to do so if you have shown that this is a singular incident and quite uncommon to your typical prompt payment. On the other hand, if you miss your bill payments on a regular basis, they may not give you the second chance you want.
" If an emergency strikes, instead of paying your mortgage with your credit card or going to those high-priced loan places, try asking a trusted friend or family member to provide you with a low interest rate bridge loan to help you through your tough spot. Be sure to a pay them back promptly.
" If you find that foreclosure is imminent, your best hope is for a foreclosure sale, the proceeds of which will wipe out your judgment. Spend some money to beautify your home with a paint job and a thorough cleaning, which will increase what you get for your home and could minimize or eliminate the difference that you'll have to pay.
No one wants to lose their home. There are strategies to avoid having a foreclosure judgment brought against you. If you follow these strategies and manage you money carefully with a budget, you should be able to enjoy your home as you long as you want!
About The Author:
Jeff Lakie is the founder of Foreclosure Resources a website providing information on Home Foreclosure