Equity Based Money Arrangement Measures

10th April 2008
Author: Amenda

Summary:
Secured loans are sanctioned by the lenders taking the value of your home as the main basis. Such loans are also available for people having bad credit rating. Borrowers who frequently take loans must be aware of equity based options available in the market. In financial parlance, the word Equity refers to the unencumbered value of the borrower's home. It is the difference between the value of your home in the open market and the loans taken against it. This concept of borrowing is very important as people usually resort to this type of loan whenever they have large requirements. A homeowner can raise a loan amount of upto 80 percent of the value of his home. Many lenders provide additional borrowing benefits like 10 percent extra loan that is usually unsecured and attracts a higher rate of interest. Even an average home in the UK costs anything above 200,000 pounds. It means that homeowners can easily get upto 160,000 pounds as a loan amount that is repayable over a period of 5-25 years. A loan secured against your home also takes into account your credit score and repayment capability. If you are standing on a strong financial footing then the rate of interest offered may be very close to the base rate of interest prevailing in the market. Since a good credit score is an indicator of your past satisfactory conduct in the financial market, you stand at higher footing than those who have a low credit score.

This is true in all cases of loans whether they are equity based or salary based arrangements. Once a lender sanctions the loan, it is not his concern that what you are doing with the loan amount, though for record purposes you may be asked to provide information on the use of the loan. A secured loan taken on the basis of equity in home is also sometimes called any purpose loan. There are various advantages associated with a secured loan. The value of your home increases with the passage of time, and therefore, the loan eligibility also keep on increasing as it is directly related with the value of your home in the open market. Consumers who take secured loans can use them for any purpose. The rate of interest is low, the repayment period is long and monthly installments are small enough to easily afford every month. These loans are available with a number of lenders – both online and offline. Online lenders and financial services firms provide quick solutions to all kinds of your financial needs.

Author Bio:
For more tips on Loans for you and your family. Amenda Dorothy works as a business writer for Ask4loan. To find small personal loan, fast secured loans, cheap rate loans visit our blog fly high with low rate loans.