Secured Personal Loans

Personal Loans Secured with an Asset.

Secured personal loans is where the personal loan lenders, such as a Bank, Credit Union, Finance Company, agrees to advance the money to the customer for the physical purchase of an item, but takes a "goods mortgage"; that is to say a "Bill of Sale" or "security" over the item; such as a car.

Vehicles are the most common item that is "secured against"; next to a house and is often referred to as car loans.

As the vehicle in this case is going to be "used" as security, there needs to be a way of ascertaining its value.

A dealer for example will have a price on the car, it will be advertised for a different price, and after negotiation with the customer, a third price will generally be agreed upon. This final agreed price; is also called, its "TRUE MARKET VALUE".

However there is a standard that is adopted by personal loan lenders; and in typical tradition, there is more than one standard; but mostly the value that a financier will put on a vehicle ( used ) is found in a book called "GLASSES GUIDE", and is also available on-line by subscription.

The other main guide is the "RED BOOK".

The term used is "booking the car".

Your car loan broker, or personal loan lender will be able to "book" the car for you, letting you know if you are getting a good deal; or not.

Both these guides represent a nation wide average of sales on different vehicles, gained from gathered data, from government motor vehicle agencies, auction houses, etc.

It represents a national guide as to what the vehicles are being bought for, traded in for, and sold for in retail, trade and wholesale situations.

Financiers generally take the "middle of the road value"; or trade value, as the value they will lend against, however this is a guide only, as the overall profile of the customer is considered, and forms part of Nigel Brookson's 6 'C' of credit assessment.

The sole purpose of secured personal loans is the motor vehicle in this case, that is being purchased, and there can not be any 'extra money on top' for anything else.

Secured personal loans could be also used for purchasing caravans, motor bikes, boats or trucks.

 

A secured personal loan can be for anything that can be registered, including:

  • Secured lending is where the financier agrees to advance the money to the customer for the purchase but takes a "goods mortgage"; that is to say a "Bill of Sale" or "security" over the item; namely the car.

    Vehicles are the most common item that is "secured against"; next to a house and is often referred to as a "Car Loan".

    As the vehicle in this case is going to be "used" as security, there needs to be a way of ascertaining its value.

    A dealer for example will have a price on the car, it will be advertised for a different price, and after negotiation with the customer, a third price will generally be agreed upon. This final agreed price; is also called, its "TRUE MARKET VALUE".

    However there is a standard that is adopted by financiers; and in typical tradition, there is more than one standard; but mostly the value that a financier will put on a vehicle ( used ) is found in a book called "GLASSES GUIDE", and is also available on-line by subscription.

    The other main guide is the "RED BOOK".

    The term used is "booking the car". more...

  • Marine Items, such as boats, and other watercraft, that can be registered like jet-skis, are basically identical to cars in the way they are treated.

    There are a few differences, however relating to the trailor, and the engine, and particularly where insuring them is concerned.

    Because the trailor, is a seperate item, and if the engine is an outboard motor, these items need to be identified and valued seperately.

  • Trucks come in a few different categories, depending on their size, weight and type.

    Many Lenders for example will only finance a Truck up to 2 tonne.

    There are a few though that will finance larger trucks, as long as the owner/directors if a company are asset backed and have a good credit history.

  • Motorbikes are one of the easiest items to finance, because they are generally bought by people who have a car, and can afford a bike as a recreational vehicle.