The Benefits Of Secured Loans Over Non-Secured OnesFast Action Finance SEO
These days, the market for loans has become very active, and this is why many lenders are marketing their products aggressively. For instance, you will find that many banks are now approaching customers in order to offer them loans, as opposed to the past where one had to approach the bank to do so. In addition to the increased marketing, the credit field has also seen an increase in the types of loans that you can get. In many parts of the world, you will have access to all sorts of loans, making it easier for you to find one that will suit your needs.
One of the loans types that you need to pay attention to is any that needs collateral. Very good examples of these are title loans in Mississauga. By definition, loans that need collateral are those that are backed by some type of property that you offer the lender as security. This feature makes title loans and other similar loans have numerous benefits over other unsecured loans. Some of the most notable of these include:
You don’t need an income
In order to apply for most bank loans, you will need to prove that you have a steady source of income for the past few months. This usually acts as proof that you will get enough money to regularly service the loan. However, when getting a title loan or other type of secured loan, this will not be necessary. The lender will simply repossess the car you have used as collateral. This means that even if you are a student, you can access this type of loan as long as you have a car and its title is in your name.
They are easier to apply for
Any loan that requires collateral often turns out to be easier to apply for compared to other loans. When getting a regular bank loan, for instance, you will need to provide a lot of paperwork. This includes evidence of a regular income, your bank statements, references and in some cases tax information. Going through all this paperwork can be quite a hassle, particularly if you are only applying for a small amount of money and want to do it in a hurry. This is why they are never used for emergency purposes. The fact that car title loans and other secured loans are easier to apply for makes them ideal for use in emergency settings.
Processing them is faster
In order to process a regular unsecured loan, many steps need to be completed. These include going through your tax information as well as checking your credit history. However, this is not the case with loans that require collateral. In the case of car title loans, the most important thing the lender will need to do is check the authenticity of the car title. They would also need to find out if there are any loans that are attached to the car. These are processes that don’t take a long time, which is why such loans tend to be processed very fast. This also happens to be the reason why they are preferred for handling emergencies.
Your credit score does not matter
When offering collateral for a loan, your credit rating normally does not have a huge role to play in determining whether or not you will get the loan. In fact, when getting some types of car title loans, the lender may not even check your rating at all. This makes it the ideal go-to financial solution for people who need to access credit, but who have poor credit.
Handling default is straightforward
When you default if you have an unsecured loan, the process of retrieving the loan can be long and arduous. In many cases, it will involve the courts and arbitration between you and the lender. This can cost you even more money, and in many cases will leave you exhausted both mentally and physically. When you have a secured loan, however, you don’t need to worry about this. You would know full well that if you failed to pay the loan, the company would repossess and sell whatever you had used as security. You would therefore not have to expend much energy in sorting such issues out.
As you can see, there are quite a number of reasons why you should consider getting secured loans over the unsecured ones. However, it’s still important to note that you will only get such benefits if you get the loan from a firm that has reasonable terms. When getting a title loan, for instance, taking your time to identify one that has terms that you are comfortable with will be to your advantage in the long run. Fortunately, getting this type of information is not difficult these days, since you can get it all online.