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Ferro Finance Posts

5 Assets you can use for collateral with a Secured Loan

If you are planning on getting a loan, you will need to have some type of valuable property you can put up as collateral. There are a number of things that you can use as collateral when getting this type of loan, and it is important that you know what they are. Those who are not able to put up any collateral will not be able to get a secured loan. Since there are so many benefits associated with these loans, you will definitely want to get this information.

1. House or Home Equity collateral loans

A lot of people who take out secured loans end up putting their homes up as collateral. Since a home is usually the most valuable thing a person owns, they use it as collateral when getting a large loan of some kind. Mortgage is not the only secured loan that you can use as collateral though. A second mortgage can be taken out on top of the first mortgage as a way to borrow against a home’s equity.

A home equity loan is a type of personal loan that is secured by the home’s equity. Because your home is one of your most crucial assets, you will need to protect it fiercely. It is important that you take the time to think about whether or not you really want to use your home as collateral, because doing so can be a fairly big risk to take.

2. Secured Car Loans

You will find that one of the most common forms of secured loan collateral is a car or some other type of vehicle. A vast majority of auto loans used to purchase a car are secured by the overall value of the vehicle. If you own a car, vehicle or even a boat, you can usually use that as collateral for a secured personal loan or even auto equity loan. You will need to make sure that you are getting a secured instalment loan from a reputable lender though.

3. Investments

You should keep in mind that your investments can also be used as collateral, as they are considered assets. Loans that use investments as collateral are called securities-based loans or stock-based loans. Depending on how much your investments are worth, you could use them as a form of collateral so you don’t have to risk losing your vehicle or home.

4. Savings-secured loans

There are some banks that will also offer savings-secured or certificate-secured loans. These are similar to bad credit options and are usually offered by banks and credit unions to existing customers. Savings-secured loans enable borrowers to keep their liquid cash in a deposit account, which is typically just a savings account or certificate of deposit. You will want to keep in mind that your deposit will accrue interest at a much lower rate than what you pay on the loan.

5. Future paychecks

It is sometimes possible to get a loan by using future paychecks as collateral. With these types of loans, you borrow money with the understanding that you will pay it back with a future paycheck. There is a big difference between legitimate cash advances with payday loans, though. A lot of lenders, banks and credit unions offer these cash advances to those who have a stable job with adequate income. This can be a decent option to consider for a number of reasons. If you want to fund a move or start new job, you will certainly want to look into this particular loan option.


There are so many different forms of collateral that you can use for a loan, but you will need to take the time to think about it before making a final decision. The more time you take to think about this, the better your chances are going to be of getting the loan you need with minimal risk and downside. If you are a homeowner, your house can definitely be put down as collateral, but you might want to think twice. The last thing you want is to lose your home, so you will therefore need to spend some time reviewing your collateral options so you can make the right choice.

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5 Common Car Loan Refinancing Myths

There are so many different myths surrounding auto loans that you will definitely want to make a point of seeing what some of them are. When you take the time to get this information, you will be able to decide for yourself whether or not you want to refinance your auto loan. The fact is that refinancing your auto loan can be a good idea, but it’s not something that everyone should do.

1. You will not be approved if you have a low credit score

One of the most common myths when it comes to refinancing an auto loan is that you won’t be approved if you have a low credit score. Your credit score is definitely an important factor that lenders consider when you submit a refinancing application, but there are others. Just because you have a low credit score just not necessarily mean that you won’t be able to refinance your loan successfully. You should at least fill out an application so you can see if you can do it.

2. A good credit score guarantees approval

A good credit score will certainly help you with refinancing your auto loan, but there is no guarantee that you are going to get approved. There are numerous factors that a lender will take into consideration when you are applying for this sort of loan, so you will need to remember that. Some auto financing companies have other requirements that must be satisfied besides just a good credit score. For example, Capital One won’t refinance a vehicle that is more than seven years old. It is important that you find out what these requirements are before you even apply.

3. Underwater auto loans can never be refinanced

It is a fact that vehicles lose about 10% of their overall value the moment they are driven off the lot, according to Carfax. Accidents as well as high mileage can also significantly lower the value of any vehicle. If the car is worth less than the outstanding loan, the loan is considered underwater or upside down. Experts often say that even if a loan is underwater, refinancing could be possible if you are able to make extra payments and pay down the original loan so that the balance is in line with the vehicle’s current value.

4. Refinancing an auto loan won’t save you much money

A lot of people are under the impression that refinancing an auto loan won’t really help you to save all that much money. The truth is that depending on what your specific situation is like, you could save a lot of money by refinancing. This is not true for everyone, but many people have saved a considerable amount by doing this. You should think about using an auto loan refinancing calculator to compare the changes to your monthly payments as well as overall interest as a result of refinancing. You should be weary of fees that complicate the calculations though. If your original auto loan has a prepayment penalty, you may have to pay part or all of the remaining interest if you pay off the loan early.

5. You don’t need to shop around when refinancing an auto loan

You definitely want to make a point of shopping around when refinancing an auto loan so that you can get the best possible deal. Those who make the mistake of not doing this usually don’t get nearly as good of a deal as they could have. When you are go0ing about comparing auto lenders, you may want to look at the interest rate they offer as well as potential fees and credible reviews. By doing this research you will be able to save yourself from quite a bit of frustration later on.


Refinancing your auto loan can be a great decision, but you will need to do the necessary research first. The more time you spend doing this research, the more likely you will be to get the kind of deal you are searching for. A lot of people have saved quite a bit of money by refinancing their auto loans, and it’s very possible that you can do the same.

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Common Mortgage Myths to know when Buying a Home

There are certain common myths surrounding mortgages that you will definitely want to know about if you plan on buying a home at some point. These myths can be quite destructive for those who purchase a home, which is all the more reason to get this information. The last thing you want o do is to make some sort of bad decision because you believed a myth. When you take the time to get this information, you will be able to make the right choices overall.

If you prequalify for a mortgage, you will definitely get the loan

It is 100% a myth that those who prequalify for a mortgage ate absolutely guaranteed to get the loan they want. The truth is that while prequalifying is certainly a good sign, there is still a chance that you will not be approved for the loan. The prequalification process is designed to provide you with an idea of how much you qualify to borrow based on your credit as well as your debt-to-income ratio. This is not a binding agreement, and the lender will most likely need additional documentation before agreeing to give you the loan.

You must have perfect credit to get a home loan

The truth is that you definitely don’t need perfect credit to get a home loan. It is important to keep in mind that the better your credit is, the lower your interest rate is going to be. Credit scores can range from 300 to 850, and anything that is above 670 is generally considered good or great. If the lender is satisfied with your overall situation, you very well may be able to get a long despite not having great credit. It is crucial that you keep this in mind when going forward.

Your mortgage payment should be precisely 28% of your income

Some people may tell you that your monthly mortgage payment should exactly 28% of your income, but this doesn’t have to be the case. The truth is that a simple percentage does not always take into account all of the variable and factors involved in this kind of a financial situation. When determining the monthly mortgage payment that you can afford, you must consider factors like your regular monthly expenses as well as how much debt you already have. Once you have taken these things into consideration, you should be able to make the right decision overall.

You must make a 20% down payment on your new home

While a lot of people choose to make a 20% down payment on their new homes, this doesn’t mean that you have to do the same. The more you put down on your home, the lower your interest rate is going to be. You should definitely try to put down as much as you can on your home loan, but you don’t necessarily have to put 20% or more down. There are even certain lenders who will allow you to put down nothing on your house, but you will end up paying a much higher interest rate.

30 Year Mortgages are the best option

It is a popular myth that 30 year mortgages are the very best option a person has, but the truth is that a shorter mortgage period could be a far better option for a number of reasons. A shorter payback period means a lower interest rate, which is something that everyone wants. If you are interested in paying less on interest throughout the years, you might want to go with a 15-year mortgage.


You will need to be aware of all the popular mortgage myths before getting one yourself. The more factual information you have on this type of loan, the better off you are going to be when all is said and done. Getting a home loan is a very big deal, so you therefore don’t want to have your decision swayed by inaccurate information. Too many people make big mistakes when it comes to getting their first mortgage. In the end you will be glad that you took the time to do this research, as it will be for your benefit.

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