What you need to know about secured loans

Getting a loan can be tricky, all the paperwork required, certified forms not to mention the time it takes to get paid. However, secured loans such as the ones provided by XCELSIOR are revolutionising the loan industry. When it comes to loans, there are two critical concepts, these are secured or collateral loans and unsecured loans. At XCELSIOR, we offer secured loans for personal and business. A secured loan is quite different from a traditional loan. This is because secure loans are only granted when the loanee pledges collateral against their loan, which acts as security. Therefore, secured loans are a far safer alternative; if you are unsure of your future financial situation. We unpack all your secured loan questions, the potential advantages and disadvantages to secured loans and the steps to securing a collateral loan.

Loan Against My Vehicle

How do secured loans work?

A secured loan, otherwise known as a collateral loan, is a form of loan where the loanee provides collateral (or an asset of sorts) as backing for the loan. All financial institutions are different. However, it is usually a given that the collateral item provided has sufficient value to cover the loan amount. At Xcelsior, we have a policy of providing 50% of the collateral value. The loan amount will differ between institutions. 

What is the difference between secured and unsecured loans?

An unsecured loan is quite different to a secured loan. It is unusual for an unsecured loan to require minimal paperwork and therefore an unsecured loan will always take much longer than a secured loan. For lenders in need of cash to cover their financial burdens, this can be problematic. Unsecured loans rely on your credit score and history of debt repayments. However, this alienates many in South Africa who need a loan and have the collateral. Unsecured loans are more expensive than secured or collateral loans. 

Examples of unsecured loans may include:

  • Student loans
  • Personal loans
  • Credit cards
  • Home loans
  • Car loans

As mentioned, secured loans rely on the provided collateral. Here’s what can be used for collateral to secure a loan, examples may include:

  • Real estate or property – this involves providing your real estate as collateral against a loan. If you forfeit your repayments, your house will be forfeited too.
  • Cash secured personal loans – are loans taken out against your personal finances. This is common if your business is struggling and you have good personal finances.
  • Inventory financing – for this type of loan, your business will offer their inventory as security against the loaned amount.
  • Invoice collateral – A business might have outstanding invoices that will eventually mature into income; however, until they’re paid, they can be used as security. 
  • Vehicle collateral – this is the best type of loan, in our opinion, which is why our loan model is focused on this. It is a great form of loan, due to the ease and convenience. It’s perfect for those requiring cash and quickly. What can be used as collateral for a secured loan? We accept motorbikes, SUVs, cars, trucks, sports vehicles and even jet skis! 

What are the advantages and disadvantages of secured loans?


Clients that are alienated by mainstream financial institutions, find that secured or collateral loans are easier to achieve than regular loans. Why is this?

Collateral loans require no background or financial credit checks to be carried out. Applicants don’t need to have a permanent job to qualify for a collateral loan. The collateral vehicle used, is kept in safe and secure storage for the duration of your loan period. This is why blacklisted candidates prefer secured loans and are welcome to apply for a loan with us. They will likely be granted approval if they have a vehicle to use as collateral.

There is less risk for both Xcelsior and the loanee. But what does this mean for you as the lender? Your secured loan interest rates are much lower. As there is less likelihood of you defaulting on your repayments and even if you do, the remaining value of your vehicle is paid out to you, meaning you can actually end up walking away with some money, despite having defaulted. 

One of the best advantages is the speed at which a loan can be granted and the little paperwork required. In the case of a secured loan, after assessing the vehicle, your money can be paid out in as little as 30 minutes, perfect for those who need an urgent cash loan. As we don’t need to assess your credit history, there is way less paperwork. In fact, Xcelsior has a paperless online loan application.

At XCELSIOR, we can provide our applicants with up to 50% of the value of the vehicle. We can ensure that the entire process is completed in as little as just a few hours. After meeting with one of our assessors, from start to finish the process takes just one day. 


Of course, there are disadvantages, albeit few. If you’re very attached to your vehicle it may be sad to let go, however, this will only happen if you default on your repayment. Even if you default, you can still walk away with the rest of your vehicle’s value after the loan amount has been recouped. 

How do you repay a secured loan? 

At XCELSIOR, we understand that everyone’s financial situation is different. You might need the financial assistance to start a new business, pay off your debts or to make ends meet when you have a little too much month at the end of your money. As a result of this, your ability to repay the loan will differ and that is why we present our clients with flexible payment terms. You can pay the amount back in one lump sum or you can make monthly payments according to a schedule that suits your budget. In the event that you cannot repay the loan as agreed, you will need to surrender your vehicle to be sold to cover the costs of the loan amount. It’s that simple.

How to choose a secured loan provider? 

You should always choose a loan provider that is both regulated and has experience. Nobody wants a better interest rate, only to have the lender run off with your vehicle. There are some unscrupulous practitioners in the loan industry that’s why we’re proud to have over 15 years of experience and more satisfied customers. Make sure you read the contract carefully and watch out for excessively long contracts with lots of confusing jargon. That’s why we do not believe in tying our customers into unreasonable contracts. We let you choose your terms and are a preferred short term credit provider in South Africa for a good reason – we make the process quick, convenient and rewarding for all involved. This is how it should be!

Steps to taking out a secured loan? 

  • Visit our website to complete the online application form. We will require your personal details, details of the vehicle you would like to use as collateral and the amount you would like to loan.
  • Once you have submitted your application, we will make arrangements for a consultant to visit your premises to assess the value of your collateral vehicle and to complete the application process.
  • We can loan you up to 50% of the vehicle’s assessed value. This amount can be paid over to you immediately. The loan process can take as little as 30 minutes to complete.

Loans are quick and easy at XCELSIOR. There is simply no reason to drag the process out. To benefit from quick loans and exceptional service, get in touch with us.

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