Taking out any financial or credit product carries a degree of risk. What are those associated with a secured personal loan?
The biggest element of risk comes in the form of missed payments. If a borrower misses repayments of a secured loan, there is not only the risk of damage to their credit history, but also the potential of losing their home, or whatever asset was secured against the loan. The risk of losing a property or another high value asset such as a car is a significant one, and as such borrowers should not enter into secured loan agreements without first giving due consideration. Additional risks may come through borrowers not shopping around thoroughly enough for the best loan deal, leading to them repaying more and potentially making it easier to fall into financial difficulty.
Avoiding the risks of a secured loan is simple to do. While it is up to the lender to provide credit responsibly, the borrower should ensure they will be able to meet repayment obligations, thus reducing the risk of their account falling into default and seeing their home or other assets repossessed.
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