What is a Collateral Loan?
A collateral loan is also called a secured loan. It is a loan obtained from a banking or other financial institution, where in exchange, the creditor may sell that which is offered for collateral if the loan is unpaid. A collateral loan is often offered at a lower interest rate than an unsecured loan, because there is a guarantee of repayment should the borrower default on the loan. A collateral loan may use different things to secure the loan. Often people use stocks or bonds to establish a collateral loan. They can use their ownership in property, where a portion of perhaps a home, or a piece of land, is set up as collateral. If the borrower defaults, he must sell the property to pay back the loan, and the lender has rights to sell the property also, even if only a portion of the full value belongs to them. In these cases, a lender would sell the home, and give the previous owner the monies not offered on collateral. A collateral loan may also be based on expected collateral, like th
It is a Loan secured by the pledge of specific collateral such as borrowing money against a watch, bracelet, or other items. The loan process takes less than 15 minutes, it is secure, and you have up to 4 months to pay it back. If you are not able to pay back in 4 months, just pay the interest and extend the loan for another 4 months!
