Loans: secured and unsecured - that is right for me?

Thousands of borrowers are forced to make difficult decisions on loans taken to make.

Among them are guaranteed to opt for a so-called "or" unsecured "loan.

Guaranteed loans, as they are, because if you write one of your property, usually provide home as collateral for the loan. Repay the loan and nothing happens. If you fail to repay the loan, the lender can away from home.

Guaranteed loans are usually only homeowners, regardless of whether they move into their house or their property, or the redemption of a mortgage. With unsecured personal loans, lenders, borrowers only promise "they repay the loan, and this is reflected in a number of ways.

In a guaranteed loan, the amount is always relative to its present value is an important factor in determining how lenders are willing to follow.

Basically, the capital you have in your house, the more ready you are likely to get. Most loans are guaranteed ? 5000 and ? 50,000, in some cases up to € 100,000 can be borrowed.

The biggest concern associated with secured loans is the prospect of losing his home. This is not something that happens "easy" in case of failure to pay a one-off. Before a decision is taken to a house in possession is a creditor will often send a series of letters always made the borrower when payments are missed.

For the continuation of non-payment, the creditor has the right to exclude and to sell the property, and is increasingly common.

Any choice between secured and unsecured loans depends on a number of factors. One of these is the amount that is necessary and if you have any warranty. Each type of loan comes with its own set of advantages and disadvantages.

First, the maximum amount of unsecured loans is usually around ? 25,000, compared to ? 100,000 for a guaranteed loan. Rising interest rates are also an important factor, since the losses from default lender, which offset higher on unsecured loans.

The other main difference is seen in credit, with a maximum of about 25 years for secured loans, and only seven years for unsecured loans.

This translates into long-term return for monthly payments lower, and therefore may be a viable option for candidates who feel they can not keep up with higher monthly repayments on a loan without collateral. But it also means that you may end up paying more interest on the loan for a longer period.

Finally, as with any line of credit for the rating of a candidate for a factor in deciding whether or not actually get the loan and the rate in the game.

Again, because of lack of security, lenders will focus more on assessment of the creditworthiness of the applicant, consider a loan without collateral as they would a guaranteed loan.