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According to the latest figures, the total secured lending on homes at the end of February 2007 stood at £1097 billion. And, that the market of secured personal loans has increased by 11.6% in the last 12 months.
Secured personal loan are availed by placing an asset (like home) as collateral. Presence of collateral ensures that the borrower will honour the contract because repeated defaults or non-payment can lead to collateral seizure. But, borrowers can easily do away with the risk factors by paying the EMI's (Equal Monthly Instalments = Principle + Interest) on time and in full.
Secured personal loans are very safe for the lenders. Hence, the loan requests get quick attention along with other basic benefits like high credit range, competitive interest rates and flexible payback options and loan clauses.
As lending is a business, the lender has to make sure that he will get his money back with profit. Factors that play a major role in secured personal loans approval procedure are:
Once the loan seeker´s past, present and future credibility is established and categorised, the lender approves the application, decides the APR, and finalises the loan terms and conditions.
Secured personal loans are usually availed for big monetary requirements. However, market report shows that homeowners and property owners are opting for secured credit even for small monetary requirements.
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Approval system of secured credit
According to the latest figures, the total secured lending on homes at the end of February 2007 stood at £1097 billion. And, that the market of secured personal loans has increased by 11.6% in the last 12 months.
Secured personal loan are availed by placing an asset (like home) as collateral. Presence of collateral ensures that the borrower will honour the contract because repeated defaults or non-payment can lead to collateral seizure. But, borrowers can easily do away with the risk factors by paying the EMI's (Equal Monthly Instalments = Principle + Interest) on time and in full.
Secured personal loans are very safe for the lenders. Hence, the loan requests get quick attention along with other basic benefits like high credit range, competitive interest rates and flexible payback options and loan clauses.
As lending is a business, the lender has to make sure that he will get his money back with profit. Factors that play a major role in secured personal loans approval procedure are:
- Credit history to calculate the loan seekers past credit standing as good or average or bad
- Debt to income ratio (DTI = Debts/Income) to calculate the loan seekers current monetary position
- Employment status to asses the loan seekers future payback capacity
- Collateral value to calculate the value of the pledged collateral, as the amount approval is usually in proportion to that
Once the loan seeker´s past, present and future credibility is established and categorised, the lender approves the application, decides the APR, and finalises the loan terms and conditions.
Secured personal loans are usually availed for big monetary requirements. However, market report shows that homeowners and property owners are opting for secured credit even for small monetary requirements.
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