Bank Secured Loan

secured6_1 Bank secured loan is the most common type of loan, although a bank can offer unsecured loans as well. Because of the current crisis the banks rarely give unsecured loans and only if your credit score is really high and a good income.


The crisis made all banks to be less trustworthy about their customers’ ability to pay the loan back. Unless your credit score is excellent or you already had a certain number of loans with the bank, you won’t get an unsecured loan. A bank secured loan requires you to pledge something you own (a car, your house, jewelry) to secure the loan, while unsecured loans requires only your signature on the loan contract.

Secured Loans

Even if your credit score is excellent and you have a really good income, a bank can still refuse to give you an unsecured loan. In general this refuse is related to their policies or to the fact that you want to borrow a huge sum.

Purpose of Secured Loans

You can have lots of reasons for applying for a secured loan and in all cases the bank wants you to secure the loan so that they will have the guarantee of getting their money back, no matter what happens.

For example, if you take a second mortgage to secure your loan, if you are late with your payments, the bank can take your house, even if your first loan is up to date. The same thing applies to any other collateral, like a car, jewelry, etc because the bank is entitled to sell or repossess the collateral for non-payment.

You must remember that in the case you’re late with your payments you will loose the collateral so before making this step and taking another loan, make sure you understand what a secured loan implies.

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