Looking for a secured loan? Key Point you need to know before applying

Secured Housing Loan

A loan which is backed up by collateral is known as a secured loan. The financial asset to be used as collateral can be the financial assets you own like a home or a car. The basic idea behind a secured loan is that lenders accept collateral against a secured loan in order to motivate the borrowers to return the money on time.

The collateral should be financially viable to back up the loan amount or at least some part of it as decided by the banks or housing finance companies. However, one should be very cautious while applying for a secured loan as in the case of a default, you can lose your collateral permanently. There are basically three types of secured loans:

Mortgage Loans: These are the most famous secured loans and are provided by many banks and housing finance institutions like PNB Housing Finance. In PNB housing loan against property, the borrower has to put his/her house as collateral to get the loan approved.

Vehicle Loans: In case of a vehicle loan, the vehicle itself acts as collateral and hence, can be taken back from the borrower in case of a default. Hence, this is also considered as a secured loan.

Secured Credit Cards: Secured credit cards are a new and innovative ways for someone to avail benefits against collateral. Here, a certain amount of cash has to be deposited by the borrower which will act as collateral for the credit card. If in any month, the borrower forgets to pay back the due amount, the same will be deducted from the deposited amount.

Key things to keep in mind while applying for a Secured Loan:


The tenure offered for a secured loan is generally higher due to the inherent aspect of security in this kind of arrangement. The tenure for the loan can be extended up to 20 years. However, the exact tenure for the loan will depend on many other factors like your age, eligibility criteria etc.


A higher amount of loan can be availed under this kind of arrangement. The amount will primarily depend on the value of the collateral. However, the credit history of the borrower and the paying capacity are also some of the very important factors on which the final amount of the loan will depend.

Interest Rate:

The loan against property interest rate is lower than other secured loan. The interest rates start getting even lower if the amount of loan availed is higher. Hence, if the collateral is of significant value, then a higher amount can be availed and that too at a lower interest rate.


As a customer, you have to search for the best lender who will be able to provide the best eligibility programs and better interest rates for the loan. PNB Housing Loan against property offers flexible and customized eligibility programs which will allow you to make the best use of your asset as collateral.

These were some of the things that you should know before you plan of applying for a secured loan.


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