Often, secured personal loans are a better option than a re-mortgage due to various reasons.

One of the main differences between the two is that secured personal loans carry lesser processing time than mortgage loans or even re-mortgages. Often secured personal loans can be provided by banks in 48 hours after the initial application, while the paper work involved in mortgages may take a long time to complete. Since a re-mortgage initiative will incur upfront fees, and possibly higher lending charges, it will be more costly than a secured personal loan. Additionally, since mortgages are paid over a long time, the total interest incurred by them will also be quite high. This makes secured personal loans a cost effective way to raise short-term capital provided it is paid off as soon as possible.

In terms of risk, the main difference between a secured loan and a personal loan is that since a personal loan is not tied to collateral, a borrower does not stand to lose any collateral in case he or she misses a payment. This places additional risk on the lender because the loan is given on the estimated repayment capacity of the individual. However, since a secured loan s provided on the basis of collateral, borrowers may obtain more money as a loan at lower interest rates than unsecured personal loans.

Secured personal loans are also a great way of consolidating existing debt. Since secured personal loans are available from 7.7 percent onwards, borrowers can use it to pay off existing debt at lower costs. Secured loans usually have no upfront fees and can be repaid over shorter periods, making them ideal for short-term financing.

The amount of money that can be borrowed as a personal loan depends on the credentials of the person who is applying for the loan. Hence, bank managers may be able to provide higher loans to individuals if they feel that the risk is worth taking. It follows that borrowers need to have a clean repayment history if banks are to trust them. Similarly, banks may also reduce the interest rate that is charged from consumers if their credit histories are clean.

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