A secured loan is a popular form of loan in USA and other countries. Valuable property significantly reduces the risk that the bank is taking, so that money is given out on more favorable terms. As a result, the transaction becomes profitable for both parties, but certain risks and disadvantages still remain. It is advantageous for banks to issue funds in the form of loans, which are 80-100% secured by the value of collateral. The financial cushion completely eliminates the possible risks in the form of non-payment of the loan. Secured money is given to virtually any person, since in case of refusal to fulfill obligations, the problem of debt repayment is promptly solved by the sale of collateral. A secured loan is also beneficial to borrowers for a number of reasons: the possibility of receiving funds with a minimum official income or completely without it; chances of a positive decision for people with a bad credit history; minimum package of documents; registration without a guarantee; the possibility of obtaining a large sum (the amount is determined by the value of the collateral on the market); long term loan; flexible repayment schedule. Collateral for loans Collateral is a set of conditions due to which the lender receives guarantees of repayment of the issued funds. The most popular types of collateral are real estate, cars, highly liquid assets, for example, securities, as well as sureties. In some States, in addition to the main collateral, creditors require confirmation of information about additional sources of income due to too high credit risks. Despite the differences between the concepts of "collateral" and "collateral" in the banking sector, the concept of "collateral" is often used, which is understood as contractual relations with certain obligations between a creditor and a debtor. Terms of the collateral loan For some types of loans, collateral in the form of collateral is a prerequisite. In addition to mortgage loans, these can be consumer or commercial loans, as well as leasing. When making contracts for large sums, banks try to get valuable and highly liquid property in the form of real estate and other assets as a guarantee. When issuing express and auto loans, loans for training and other similar services, the purchased car, as well as other movable property and inventory items are often issued as collateral. The mortgagor is the borrower or his proxy, who acts on the basis of written permission. Collateral mortgage loan Mortgage is the most popular of all collateral loans. Thousands of borrowers from Russia rush to take advantage of a unique opportunity to acquire expensive real estate here and now every year. After the transaction is completed, a family or single young people become full owners of a house or apartment and continue to pay the loan in cash, receiving all the benefits of having their own housing. Modern real estate is too expensive, so you can wait for the accumulation of the necessary amount until retirement. But even this imperfect scenario may fail, since square meters in large and small cities of Russia are continuously increasing in price. Thus, the accumulation of the necessary amount, most likely, will not solve the housing issue. This is the main reason for the popularity of mortgages – the opportunity to create decent living conditions here and now. Collateral loan for real estate Despite the active criticism of mortgages, such loans are usually the most inexpensive. If there is the necessary collateral, experts recommend using the maximum available loan. In addition to an acceptable interest rate, within the framework of a collateral loan, larger amounts are often offered for issuance for the maximum possible time. When applying for a collateral loan, bank customers often face the need to pay additional expenses. First of all, we are talking about buying a property insurance policy. It will also not work without an assessment of the collateral. Refinancing of collateral loans The term "refinancing" in the lending system is usually understood as partial or full repayment of the loan through the issuance of a new loan on more favorable terms. Not all banks provide the refinancing service, although the practice of using such schemes in Russia is quite common. Often, the amount of a recently issued loan exceeds the amount of the original debt. The repayment period, the currency of the loan and the amount of the monthly payment are also subject to change. Refinancing of collateral loans involves re-registration of collateral between two banks. Advice from Compare.: Valuable movable or immovable property is a real trump card up the sleeve of a modern borrower. A client with a good collateral is happy to offer acceptable credit conditions in any bank in the country. Even a problematic credit history of a potential borrower does not become an obstacle to the issuance of money. The flip side of the coin is the need to remember about the risks of loss of collateral, which automatically becomes the property of the bank in case of non-fulfillment of contractual obligations.