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Can I use my home as collateral for a loan?

Can I use my home as collateral for a loan?

Buying a property with a home loan typically means using the property’s value to secure the loan; a practice called mortgaging your home. But it’s also possible to use the value of your property as collateral on another loan, provided you fulfil the eligibility criteria and have enough usable equity available.

What is collateral or security on a loan?

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When a bank or similar financial institution lends you money, they’re taking a risk that you may not pay them back. The higher a lender feels this risk is, the more the lender may charge in interest and fees on the loan.

To help reduce the lender’s risk (and the cost of your own loan repayments too) personal installment loans Hamilton MS, you can offer the lender security or collateral for the loan.