What is a secured personal loan?
A secured personal loan is a loan that is backed by something of value that you own, which is collateral. There are many types of property that can be used as collateral, for example, your car or your house. Thanks to that guarantee, lenders are riskless and can offer better interest or larger loans.
How does that benefit me? There are three main benefits of securing your loan with collateral. Because Natwest Products from Express Finance the loan is collateralized, it reduces risk to the lender, and so many lenders can:
Approve you for a loan when they wouldn't without the guarantee, and they do it even if you have limited or no credit history
Offer you a loan for a larger amount so you can do more with your money
Give you better loan conditions, such as lower interest, compared to an unsecured loan, which can save you a lot of money in the long run
Some lenders (like Oportun), offer additional benefits such as:
More than 21 months to pay your loan Fixed and accessible payments No penalty for paying early or large payments at the end of the loan Help you establish the credit history you need to open up more opportunities in the future
How do secured personal loans work? When you have collateral for your loan, your lender puts a lien on it — or a claim.to your collateral in case, you do not pay the loan. But this does not affect you in daily life. For example, if you use your car as collateral, you continue to have it and drive it while you pay off your loan.
Once you pay off your loan, the lien is released. However, if you can't make your payments or don't meet the terms of your loan, your lender could keep your collateral to reduce the amount you owe.
Secured personal loans are different. If you are thinking, "This sounds like a title loan," it is not. There are two big differences with Oportun Terms: A secured personal loan is a long-term loan that pays off in 24 months or more. A title loan is a short-term loan that usually has to be repaid in 30 days.
Price: The APR on secured loans is generally capped at 36%. Title loans often charge three-figure financing. What does this mean for you? Oportun's secured personal loans give you more time to complete your payments than title loans, so they better fit your budget. And you can have one just as fast.
How do I know if a secured loan is right for me? A secured personal loan may be easier to get, even if your credit score is low or you don't have any yet. This is a huge advantage if you are just starting to build your credit history and realize that traditional lenders are not going to help you.
Also, no one knows your situation better than you. Lenders only have to look at your past payment history; they don't know how your situation is changing. You are the only one with an overview of your income and expenses. If you are confident in your ability to make monthly payments, a secured loan can be a great option to get the loan you need at an interest you can afford.
Guaranteed personal loans in Oportun
Depending on the information on your application, some clients will qualify for a guaranteed loan. With a secured loan, we are likely to offer you more money at a lower APR, and more time to pay it off. visit website
Both types of personal loans offer you fixed and affordable payments. And we always report them to the national credit bureaus to help you establish your credit history. Learn more about Oportun's secured loan terms.
This information, including any content and opinions of third parties, is for educational purposes only and should not be used as legal, tax, or financial advice, nor to indicate the availability or adaptability of any Oportun product or service to your unique circumstances. Contact your independent financial advisor for the best advice for your personal situation.