If you own your own home then you may not realise it but it could help you get a great deal on a personal loan - and it could save you a lot of money in the process. It doesn't matter what you want the money for - if you're prepared to use the property you own (even if you only own it by virtue of your mortgage!) then you can access some of the best loan interest rates in the sector.

As a homeowner you will qualify for a secured loan rather than an unsecured one. In simple terms all this means is that you can use your property as a guarantee against the money you borrow. So, you agree with your lender that you will borrow the money you want. You agree to make your repayments according to your loan schedule for as long as it is set to last. And, you agree that they can use your property to get their money back if you stop making your repayments as you should.

As you can see this is a great win-win situation for your lender - but it's a fantastic win-win situation for you too. The fact that you are willingly giving your lender this kind of security means that they will give you preferential interest rates in return. So, you could find yourself saving an awful lot of money both in your regular repayments and in the money you pay back overall. This could run into hundreds or thousands of pounds depending on how much you want to borrow. You'll also find that you can borrow far greater sums with this kind of loan than with an unsecured option.

There's no reason to be worried here - even though you do technically risk your home with this kind of arrangement - as long as you are sensible. For example, you shouldn't borrow more money than you can comfortably repay. You certainly shouldn't use this kind of loan to shore up leaky finances unless you KNOW that you can meet your repayments. And, you should look at payment protection insurance as a back-up if you have any worries left at all. This way your repayments will be covered by your policy if you get into unforeseen difficulties during the term of your loan period.

If you are being sensible about all this then you'll also realise that a reputable lender won't want to repossess your home at the drop of a hat or at the first sign of trouble. The majority of lenders will help you as much as they can as long as you let them know what's going on if you do happen to get into trouble with loan repayments. For most of them legal action is actually a real last resort. All this should go some way to making you feel better about using your home to raise finance. The rates you'll undoubtedly get will make you feel even better - especially if you shop around for the best deal you can get.

About the author:

This article was written by Gary Tallon, a writer of over ten years experience in finance and the homeowner loans industry.

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