What Makes Secured Line of Credit Better Than Unsecured LOC
Are you thinking of borrowing some money?
It’s a point where you need to decide whether to opt for an unsecured LOC like credit card advances or secured Line of Credit like searching for title loans near me.
Sometimes people get confused about which option will suit them.
So, its time to know the major difference between both options.
However, it would be best if you had an idea of both terms before you can look into their points of difference.
What is a Secured Loan?
As the name tells you all, it’s a loan when you get a loan amount when you offer some sort of security to the lender.
In simple words, you can borrow money against collateral, and it could be your home or your car.
A car title loan is a less risky secured loan than that of a mortgage as in case of nonpayment, and you don’t lose roof on your top since the loss of the car isn’t that big.
You can always finance a used car with better terms.
However, losing your home and asking the lender to fund it again is difficult to cross.
What is an Unsecured Loan?
It’s a type of loan where you get a loan amount without putting your home or car at risk. It might sound a better option, but this facility comes with some limitations.
The benefits of having an unsecured loan are that the lender doesn’t come for your property or car when you don’t pay him off.
However, you should be fully aware that an unsecured loan like a payday loan or credit card advance has a borrowing limit, and you can’t expect to loan a significant amount through it.
Why is Secured Line of Credit Better Than That of an Unsecured Line of Credit?
When you start searching for title loans nearby, then you come to know that lenders are ready to pay you more than 40 percent of your car’s market value.
For example, when your car’s market value is $20,000, you can borrow more than $8000 from your lender.
This limit is indeed significant, and you can meet up your emergency needs with it. However, you can’t borrow that much money from an unsecured LOC.
For example, if you have a credit card, you have a limit of $1000 per month. You can’t borrow beyond that limit.
Another thing that makes people look for the best title loans nearby option is the overall borrowing cost.
A plus point of secured LOC is that you put your car at risk to drop down your lender’s default link. And it’s how you can expect a low-interest rate on loan.
Contrary to this, the cost of an unsecured loan is more as the lender will always come up with a high-interest rate, increasing your overall cost of borrowing.
When it comes to approval and speed of loan application, you would be happy to know that you can get a secured loan like title loans near me quite fast these days, you don’t have to wait for weeks.
As soon as you fulfill all loan requirements like a lien-free clear title, insurance, and income proof, you can easily have cash into your account within 24 hours.
That means payday isn’t the only best option you have, and you can borrow more with title loans.