What is a secured Loan
A secured loan or sometimes called a homeowner loan is a loan secured on your collateral which is usually your home but can sometimes be other possessions. Normally secured loans allow you to borrow from £25,000 and the collateral is used as security against your repayments. Depending on the value of your property and your current mortgage will depend on how much money you can borrow. If you already have a high mortgage on your property an secured loan may not be an option as lenders tend to like equity in the property when providing secured loans
Reasons for Applying for a Secured Loan
You may choose a secured loan if you need to borrow in excess of £25,000 which is to much for an unsecured loan (link to unsecured loan page). Remember the payments are secured on your belongings so make sure you can easily afford to meet the monthly payments of the secure loan.
Secured Loans for Any Purpose
If you take out a secured loan it can used for any legal purpose, some people take out a loan for large home improvements, to raise capitol for a business or sometimes for debt consolidation. Usually the lender will ask what the loan is for but this is just for research purposes and will not effect your chances of being accepted.
To Take Out A Secured Loan You Will Need:
A good credit History
Having a good credit history is essential as most lenders are less willing to provide secured loans to people with bad credit. This represents a risk and if accepted the interest rates could be very high.
A Fixed Address in The UK
You should have a good address history within the UK. Lenders do not like agreeing to arrange secured loans to people that have moved on a frequent basis, ideally you will have been in your current address for at least 5 years
A payment Plan That Is Realistic
Make sure you enter into a realistic payment plan if you enter into any loan agreement. Take all your other commitments into consideration along with unforeseen circumstances. Agreeing to a payment plan that is difficult to meet every month is not a good idea.
Before Applying For A Secured Loan Consider This
It may be worth taking out an insurance policy in case anything unexpectedly happens such as being made redundant or falling ill which means you are unable to work and meet the repayments on your secure loan. Take the appropriate advice on these insurance policies. It is wise to insure secured loans
Taking out unsecured loans should not be thought of lightly. When you decide to take out a loan secured on your assets you run the risk of having them possessed if you fail to meet the payments. This is the worst case scenario and is the reason you should always make sure the loan repayment schedule is affordable. Lenders will always work with you to repay any unsecured loan and help you as much as possible as long as you keep in contact.
You may want to repay your loan early but remember that some lenders will charge an excess for doing this, it is cheaper sometimes to let your unsecured loan run its course for the agreed payment time.
Avoid making multiple applications for secured loans as this will effect your credit rating negatively. A credit file with multiple searches in a short space of time will not look favorable to other credit providers
Secured loans are typically longer term loans and are repaid over 5- 25 years. It is important to remember that the longer the term the more the interest will be so although smaller payments over a longer period will seem attractive your secured loan Will end up costing you more.
Secured loans are available to arrange on line, complete our quick form today and your details will be securely passed to our main partner lender to find the best secured loans.