Trends and market studies reveal that more and more borrowers in the UK are getting attracted to unsecured loans. Absence of security, fast processing, quick approval, no legal formalities etc. are some of the reasons that charm borrowers. People take unsecured loans as risk-free borrowing options in which the lender can not seize your property, in case you default on the loan.
However, despite the mad craze for unsecured loans, the original loan products of the market that are secured loans hold their position as strongly as they did before. These loans have withstood the coming of new loan products in the market and have emerged as winners. This is due to the reason that secured loans enjoy the lowest interest rate than any other product in personal finance category.
Secured loans have sustained well in the UK loan market because of the following reasons:
Cost-effective borrowing options- Secured loans are quite affordable because the rate of interest charged on them is quite low. The asset involved in the loan deal is a big enough assurance for the lender to offer a low rate of interest to the borrower.
Flexible repayment options- Secured loans give you the benefits of flexible repayment options. One can choose among the different repayment modes, type of interest rates, etc. Other benefits like deferred repayments, repayment holidays and accelerated payments without penalties are also there in case of secured loans.
Huge loan amount- Only secured loans can fetch you hefty loan amount. This is because the loan amount depends on the equity in your home. One can also get up to 125% of the home equity value and thus, can fund big financial requirements.
Easy availability- If you are a homeowner and willing to your home as collateral, you'll not have to hunt for loans. Loan deals will flow by themselves because lenders in the UK prefer giving loans to those who own a house.
So, secured loans come with a plethora of advantages, both for the lenders and borrowers and that is the reason that these still cover 80% of the UK loan market.
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