A secured loan is made secure by the borrower pledging a specified item of value, to ensure repayment of the debt to the lender. In the event the borrower does not honor the loan agreement, the lender can take possession or force the sale of property used as collateral to repay the debt. If the collateral does not equal the amount of the loan, he has the right to pursue a judgment for the balance owed.
The fees and terms of a secured loan are more favorable to the borrower, since the lender has less risk. When it comes to real estate, the most common form of secured debt is the lien or mortgage, where the real property is held against the repayment of the debt. Our Coachella Valley corporate attorneys provide knowledgeable advice in these matters.
An unsecured loan is not protected by the presence of real assets or collateral to guarantee repayment of the debt to the lender. The lender risks losing their investment entirely in the event of default by the borrower, consequently, fees and penalties are higher, usually structured and quite often due within a specified amount of time.
The borrower who obtains this type of loan has exceptional credit and guaranteed income. Regardless of which loan might meet your specific needs, obtaining any loan is complicated and should not be undertaken lightly.
Our Coachella Valley corporate attorneys are a prime example of how a respected law firm versed in every aspect of the law and its intricacies, can provide invaluable guidance for anyone considering a loan.