Every worldly-wise person tries to make it sure that he mobilises his resources in the best possible manner. Many people take secured loans against the equity available in their home to meet a pressing financial need. Now is this way of mobilising one’s home equity is a prudent step! This article sheds light on this aspect by discussing the pros and cons of secured loans.

In secured loans the lender has the guarantee of getting the loaned amount back even if the borrower fails in his repayment. The lender can take possession of the home offered by the borrower as collateral and use it to retrieve his money. This fact eliminates the risk of the lender and he remains ready to offer the loan with flexible terms.

In this way secured loans come with low interest rate, small repayment instalments and long repayment period. The borrower is also allowed to takeout a huge amount of cash. Missed payments are also not taken seriously. This minimises the cost of the loan and make it easy for the borrower to pay off the loan.

However, secured loans have their share of seamy side. Though secured loans are not risky for the lenders, they are risk free for the borrowers. In case any emergency occurs and he fails in repaying the loan then he will have to lose the possession of his home.