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UK Mortgages & Loans -> Secured Loans

A secured loan is a basically a loan which is secured against a borrowers asset such as their property. The sum of money that they are allowed to borrow will normally depend on the value of the equity in their property.

A secured loan is always a lot easier to obtain compared to other loans such as an unsecured loan. They are also a lot more flexible in their terms as well as having a lot lower interest rates.

These forms of loans will also come with the ability of having a greater selection of repayment periods compared to that of an unsecured loan. A lot of secured loan lenders will also not charge any upfront survey, legal or other charges.

These forms of loans are also known as a number of different names such as a homeowner loan and a second charge loan. With the homeowner loan, the loan will be secured on the borrowers’ property using a second charge, which will not actually disturb their existing mortgage loan. A first charge loan however, is a loan which is charged to their property after it has already been repaid in full.

The borrower is able to receive a very low interest rate with a secured loan simply because their house will be used to provide a form of security against the loan. Though the rate of interest will also depend on how much money they want to borrow and of course their personal financial circumstances.

A secured loan is very beneficial to a borrower for a great number of reasons . Firstly, a secured loan is a lot easier to obtain by a borrower due to the fact that a form of security is provided against the loan by the means of their home. If the borrower would like a large loan or they find themselves in a hard financial situation they are more likely to obtain this loan that they need by using this secured financing and they will more than likely be approved. Secondly, because of the fact that these secured loans have a smaller risk to the loan lenders who provide them, the borrower may also be offered better terms compared to that of an unsecured loan.

For instance, they tend to have greater repayment periods, larger loan amounts and great rates of interest. They typically have a repayment period of around 3 to 25 years and the loan amounts can be as high as £250,000, though this is not the normal case, as the general largest amount is around £75,000.

A secured loan may also provide the borrower with more choices. Once they have received their loan amount, they are able to repay debt consolidation loans, car loans, or simply use it for renovating their home or funding other important expenses.

A secured loan lender will normally offer these forms of loans to those borrowers who have a bad credit history. A borrower’s credit history may have previously been affected by payment arrears, CCJs, bankruptcy, defaults or late repayments. If the borrower can obtain a loan of any type, they will have the opportunity of being able to improve their credit score, which in the long term would have significant affects on making them able to apply for other forms of credit. As well as this, because these secured loans come with an easy repayment option and a lower rate of interest, the borrower is easily able to keep up with their repayments and make them on time which will of course help to improve their overall credit score.

The loan markets nowadays have a great number of secured loan lenders who offer numerous loan packages which will suit the needs of each borrower. All the borrower will need to do is to simply find the most appropriate package for them. Another option which is available to borrowers and is very beneficial to them is to search for their loan lender on the internet. This will prevent them from having to visit each lender on the high street; they can just visit their websites on the internet in the comfort of their home instead. These lenders will have their own secured websites which the borrower can log on to. They will then be able to compare various loan quotes from different lenders and complete a simple application form on the web. They are also able to contact the lenders by telephone if they have any confusion or enquiries.

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