Despite Setbacks, Borrowers Continue to Rely on Secured Loans

SAN FRANCISCO, Feb. 4, 2014 /PRNewswire-iReach/ -- One out of three individuals (nearly thirty three percent of the US population) faces some of credit issue in the United States. This large pool of hundreds of millions of US residents without an outstanding credit reputation often face the risk of being rejected for numerous transactions, from the very basic credit card and loan applications to higher level transactions involving car and home loans.

A special category of loans, secured loans, has often been considered an optimal solution for both lenders and borrowers. The borrower pledges a collateral as security for the loan and the lender offers the loan to the borrower despite the risks. The collateral, essentially, is the lender's hedge against risks and defaults.

Based on a Consumer Credit – G.19 release by the Federal Reserve, although the total pool of securitized assets (revolving) has fallen from $160.2 billion in 2008 to $16.2 billion in 2012, there remains billions of dollars in secured loans still floating in the market. They haven't lost their appeal, primarily due to the fact that many borrowers make use of secured loans to start the process of rebuilding their credit.

If there were a loan that would meet the needs of both the borrower and the lender, it would be a secured loan. Both parties benefit -- the lender gets to mitigate the risk on its principal, while the borrower receives the opportunity to rebuild credit and obtain a loan despite credit issues.

"Secured loans are making a comeback despite a noticeable credit slowdown in recent years. They remain popular for various reasons and are often a 'go to' category for individuals and businesses that have been plagued with credit problems," says Yonni Rossa, CEO and founder of Loans.net, a loans comparison website that hosts a special category of lenders providing low interest secured loans.

The benefits cited by Loans.net at http://www.loans.net/secured.html include, but are not limited to, the following:

* Potentially larger loan amounts. From short term secured loans to long term car and home loans, secured loans have been provided in a wide variety of situations. Furthermore, since the loan amount is secured against an asset as collateral, the potential amount of approval remains significantly large.

* Longer loan duration. Generally, the term varies from a few months to up to forty years and for personal loans it could be as much as ten years.

* Lower interest rates. Lower interest rates are very much a reality due to the perception of lower risk.

* Flexible repayment terms and avoidance of pre-payment penalty. Many programs offer consumers the opportunity to pre-pay without a penalty and that is a win-win for borrowers.

* Higher approval rates. The presence of collateral makes it easier for lenders to approval most applications. Approval rates are typically higher as compared to other loan programs.

Loans.net is a free website for borrowers. The site features a wide range of comparison tools. Individuals and businesses can request a quote for a wide range of loans. For more information or to apply for a loan online, visit http://www.loans.net.

Media Contact: Yonni Rossa, I.D.S International inc, +1-646-257-4131, [email protected]

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SOURCE Loans.net