On Mon, 24 Mar 2008 12:03:40 GMT, Mike_B
wrote:
>Nobody said it was, but IMO if a bank lends money based on the
>expectation that in case of default it be repaid by sale of the property
>then they should be making them secured loans, not
Why is it up to the bank ? If the customer, for whatever reason, wants
an unsecured rather than a secured loan, why should the bank refuse ?
There are some valid reasons for wanting an unsecured rather than
secured loan.
> pretending they are unsecured
The bank is *not* pretending any such thing. The loans *are*
unsecured, if they weren't the bank wouldn't have to go to court as
described in the original post.
>in order to be able to charge a higher interest rate.
An unsecured loan represents a greater risk to the bank and therefore
attracts a higher rate because :
a) It will cost more to reclaim the debt by gaining access to the
customer's assets than for a secured loan
b) There will always be some customers who have no assets when they
default and so the bank won't get any money back, which won't happen
with a secured loan.
It is *not* because the bank cannot get anything back from every
customer who defaults on the loan
Cheers,
John |