When you’re looking into the possibility of a secured loan, you have to take the time to compare secured loan requirements. Though many of the processes are similar from one lender to the other, others can be quire different, and you want to know this before you begin applying for a secured loan.

Type of Collateral Required

When you compare secured loan requirements, one of the first things you need to find out is what kind of collateral you will need for the loan that you seek. Some lenders will only accept real estate and motor vehicles as collateral, so if you are looking to sign over investment securities or personal property such as household goods, you want to make sure that the lender you choose is in a position to accept the collateral you offer. In addition, you want to make sure what costs you will need to extend in order for the lender to record your collateral, and if it involves real estate, will they require you to pay closing costs on the loan proceeds.

Age or Condition of the Collateral

In many causes, when collateral other than real estate is pledged, the lender sets a precedent on the age or condition. This question another one you need to find out when you compare secured loan requirements of each lender you research. Again, if it involves real estate, they are not interested in the age or condition but the appraised value, which, of course, has a direct bearing on the age and condition of the property. On the other hand, if you are pledging a mobile home, motor home, or boat, the age and condition of the property are contingent upon the age, especially that of a motor home that one drives. All three of these types of collateral decrease in value over time compared to real estate that increases in value in most cases.

Cost of Recording the Collateral

In most cases, a lender will require you to pay a fee for them to record the collateral so that it will be easier for them to reclaim the property in the event of a default. When you compare secured loan requirements, you need to find out from each lender what the cost of recording collateral is so that you know if one lender is substantially higher than another is, thus increasing the overall cost of the loan dramatically. The reasoning here is that all lenders within a regional area should charge approximately the same for this service, and if there is a large variance, it means that one of them is making a profit on the cost of collateral recording on top of the interest rates. You are already paying for interest on the loan, so you want to avoid lenders who will charge a premium for other services on top of the interest and other standardized costs of a loan.