Bank loan allows you to get money in debt for any purpose. But in most cases, the thought of what is a secured personal loan is associated with high-interest rates. You can reduce them by providing loan security. However, not all citizens know what the bank accepts as collateral. In addition to real estate and expensive property, there are many other options.
Options of Loan Security
Loan security can vary greatly. All guarantees are nominally divided into basic and additional. The first includes the provision of the property that a financial institution will be able to realize in case of impossibility to settle a loan. The second group includes the provision of the right to recover the debt from other persons or the issuance of an additional guarantee.
Real estate is the classic version of the pledge. Banks accept:
- Land plots;
Real estate, which is the only residence of the borrower, does not always work. Implement such a room can not always. A certificate of ownership is made after the deal. After which, it will be impossible to:
- Resubmit property as collateral.
Violation of the terms of the contract allows the bank to demand an immediate refund from the borrower.
Such movable property as transport and agricultural equipment may also be loan security. If a legal entity wants to use the service in addition to security, it may be necessary to provide part of its funds. Usually, the size of the down payment is 10–20. A similar rule applies in the case of granting an auto loan to an individual.
Equipment and Animals
As a security, it is possible to provide:
- Production equipment;
- Inventory items;
Mortgaged property must meet the requirements of the financial institution. Initially, it should not be stationary. All equipment components must function properly to avoid difficulties with the implementation of the asset. Requirements for the degree of wear and year of manufacture are individual.
For each piece of equipment, you need to provide inventory cards. This is necessary for its further identification. To ensure the safety of the pledge, representatives of the bank may periodically make field checks.
This type of collateral includes the involvement of a third party in the transaction. A third-party bank undertakes some obligations in case of impossibility of repayment of debt. This type of guarantee is presented exclusively by a financial organization, provided that the company plans to receive money in debt. The borrower must provide a package of documents. On its basis, the institution analyzes the financial activities of the applicant. The bank must be confident in the trustworthiness of the client.
Loan collateral can be provided in the form of purchased goods. If a person borrows money to purchase the desired item, then it will be pledged until full repayment of the debt. Examples of such loans are car loans and mortgages.
Choose which of the secured loans will work for you and make sure to get the best rates for your loan.