When To Offer Security On Your Loan

You can assume that your lender will be satisfied with an unsecured loan. Most private loans - especially loans for personal uses like education, or debt refinancing - are unsecured. In general, your lender is considering your character and their trust in you and probably won't feel the need to take a lien on a piece of your property, the way a bank might, to back up the loan.

But there may be times where you want to offer collateral to secure the loan in order to motivate or reassure a lender. Or, there may be times where a lender does request security.

Virgin Money offers a security agreement with both of our Handshake Plus products. This is a legal document which accompanies the promissory note and which identifies in detail the piece or pieces of property to be used as collateral. Often, this is enough.

For lenders that want the additional assurance of placing a lien on your property, for an additional fee, Virgin Money can complete a UCC filing on most assets, except motor vehicles and boats.

The best way to avoid loss of your collateral is to pay back the loan. Although private lenders tend to be more flexible that banks in their willingness to restructure repayment to help you get back on track, avoid the unpleasant situation altogether by paying off the debt as you agreed.