Collateral can be defined as an asset of value which is used to help secure a loan. When borrowing money, what is agreed upon is that the lender of the money can take that collateral and sell it to receive their money back if the borrower is unable to pay back the loan. Having collateral makes the chances of getting a loan easier. Franklin hard money loans generally make use of collateral, when lending.
When issuing collateral to a money lender, the chances of risk are lesser for the lender. Therefore the borrower is more likely to receive a better rate for their loan. There could be multiple different types of collateral that could be pledged to a money lending organization. Any assets that a lender accepts for collateral can be deemed collateral for the loan.
Generally, lenders would prefer collateral which is easy turn into cash.
An example of the best kind of secure collateral would be money in a savings account. Lenders would know how much the savings is worth and would be easy to collect. However, there are multiple other forms of collateral. A few common types of collateral include:
• Real estate.
• Cash accounts.
• Equipment and machinery.
• Insurance policies.
• Collectables and valuables.
• Payments from customers received in the future.
Even when seeking to receive a business loan, personal assets might be pledged as collateral as a form of personal guarantee. In specific instances, such as buying a house, borrowing money without pledging collateral might be impossible. However, there may be some places that issue loans without collateral, and a higher interest rate would have to be paid for borrowing.
Seeking the right organization that is trusted, well-established, and fast in service are some of the primary factors that most individuals look for when acquiring a loan. BridgeWell Capital is one of the most trusted private money lending firms in the industry, through hassle-free procedures, BridgeWell ensures the lowest down payments, and incredibly quick approval and funding services are provided to all potential clients for their finances.