There are a range of advantages to taking out secured loans and a range of disadvantages to match them. Like any lending product it is essential that you weigh up the pros and cons here before you make a decision. This kind of solution will suit some of us really well and some of us not so well. Getting things wrong here could have a serious impact on your finances as a whole.

Three reasons why you should consider a secured loan

1. Cost
Secured loans are cheaper than unsecured loans. The fact that you are willing to secure your borrowing against your home makes you much less of a risk to a lender than someone who can't or won't. They know that they can always get their money back if you default on your agreement. So, as you are perceived as a less of a risk, they will give you low interest rates. This could mean that you have lower monthly repayments and less to pay back overall.

2. Speed of arrangement
Secured loans can be quicker to arrange because your security will be in place. It is less of a job for a lender to check out your financial history because they are being given the added benefit of a guarantee against your borrowings in this instance. They will make checks but you will often find that this kind of loan will be given priority by many lenders and many can be arranged extremely quickly.

3. Ease of arrangement
Although lenders will check you out here the process may not be as complicated as it might be if you are applying for an unsecured loan. With unsecured loans lenders have to check your ability to afford the loan repayments extremely thoroughly as you are a higher risk to them. Your security here will make things much more simple.

Three reasons why you should not consider a secured loan

1. Risk
The fact that you are using your home to guarantee your borrowing here may get you the best deals but this doesn't come without risk. You shouldn't enter into this kind of agreement unless you are 100% convinced that you can meet your repayment obligations. If you default on your loan then your lender has every right to use your secured property to get their money back.

2. Priority debt
Taking out a secured loan gives you another priority debt. This may not be what you are looking for if you already have a lot of debts. Priority debts are harder to sort out than non-priority products if you get into financial difficulties -- they have more serious consequences.

3. Suitability
Don't be tempted just to take up a secured option here just because the advantages look good on paper. You need to make sure that the advantages are right for your circumstances. If you don't actually need the advantages that a secured loan will bring, for example, then why take one out? An unsecured loan here could actually be a better and lower risk option.

It is important to take time to think through your options here. Secured loans may suit some people but may not suit everybody and they shouldn't simply be taken out because they can be cheaper. Think about the risk factors first and, if they are not an issue for you, then consider the advantages before you make a final decision.