Borrowing with security means borrowing money against something of value that you own or are about to buy. It is the lender who has the security, so to speak, which means that you are the provider of the security (the collateral) and the lender lends money with the knowledge that they can get the money back by taking the security instead if you cannot pay. When you are going to borrow with security, there are a number of different things you can use as collateral such as a house or other dwelling, a car, boat or motorbike or possibly something else as long as it has a relatively large and definite value.
One of the biggest advantages of borrowing with collateral is that the interest rate is relatively low. Exactly how low the interest rate you get depends on what you have for collateral, but if you, for example, want to borrow something of great value as a house, you have really good interest rates. The fact that you get such a good interest rate when you borrow with security is simply because the bank or lender feels a certain sense of security in knowing that it would be relatively easy to get back the money loaned out in case something unexpected happens and you cannot repay the loan that you should.
Mortgage / Housing loan
When you own a home or are about to buy one, you can take a mortgage with the home as collateral. Mortgages (also called home loans or home loans etc) are the best type of loan with collateral as it is often a fairly safe investment for the lender and the interest rate then becomes low. It is very difficult to find a loan with a better interest rate than a mortgage. You cannot borrow on the entire value of your house, normally you can borrow up to about 85% or similar. This is called the bottom loan and the rest of the loan is top loan, which is a bit more expensive. Here during the article we have listed the major lenders in the country who deal with mortgage loans and you can find their list rates there.
Read more about mortgages and all this means here.
Car loans (also boat loans and motorcycle loans)
A car loan is basically the same as a home loan though here is instead your car, or the car you are about to buy, your security. How high your interest rate will be varies, but it is usually relatively low. When you borrow a car, you can often lend about 80% of the car’s value. The fact that you cannot borrow more than that is because the car often decreases in value very quickly and for the lender to be sure that they can get their money you can only borrow on parts of the total value. It works much the same for other types of vehicles.