Compare secured loans
Get a quote for a loan up to £250,000 with rates starting from 6.94%
Minimum and maximum ages
Applicants must be over 18, with the maximum term finishing before they turn 80-85 depending on the lender
No minimum occupancy requirement with most lenders
There is no minimum income requirement with most lenders
Smaller property values
No minimum property value requirement with most lenders
How do secured loans work?
What are the different types of secured loans?
There are several different types of secured loans available, and which one is right for you will depend on why you need the money and your financial situation. Here are the main types of secured loans:
Homeowner loan: This is specifically a secured loan that uses your home as security. Your home is at risk if you don’t keep up with the repayments.
Logbook loan: This loan uses your car as security rather than your home. They are less common and can be used for relatively small loans.
Second-charge mortgage: This is another mortgage on your property that uses the equity in your property as security.
Debt consolidation loan: You use this type of secured loan to pay off your existing debt, so you only have one repayment to make at a lower rate.
Bridging loan: This type of loan is used to buy a new property before you’ve sold your existing property and uses your home as collateral.
There are also different interest options you can choose from, including:
Fixed term: The interest rate you pay will stay the same for the lifetime of the loan, so your repayments will remain the same.
Short-term fixed term: Your rate will be fixed for a limited time, usually between one and five years. After that, you will pay the lender’s variable rate, which is generally more expensive.
Variable rate: The interest rate will change in line with the Bank of England base rate. This means your repayments could go up or down at any time.
Should I get a secured loan?
Getting a secured loan is a big decision. It can give you access to a larger loan at a lower interest rate compared to an unsecured loan. However, it does mean putting your property at risk.
If you need to borrow a significant amount of money and you have a healthy amount of equity in your property, a secured loan could be a good option for you.
Only borrow what you can afford to repay because the consequences of not falling behind on your repayments could be losing your home.
Here’s a look at the pros and cons of secured loans:
Pros and cons of secured loans
Pros of secured loans
Lower interest rates compared to unsecured loans
Higher loan amounts are available with secured loans
Longer repayment period
You can repay a secured loan over a longer period than unsecured loans
They're available to borrowers with bad credit
Build credit score
You can build your credit score as you pay back the loan
Cons of secured loans
Your home is at risk
You could lose your home if you can’t repay the loan
Extra charges can apply, like valuation fees or early repayment charges
Long application process
The application process can be a lot longer and more complicated than for unsecured loans
Risk of paying more interest overall if you borrow over a long term
Having a secured loan can make moving home in the future more difficult
What are the alternatives to a secured loan?
If you want to borrow a large amount of money, for example, more than £25,000, there aren’t many options other than a loan secured against your property.
If you want to borrow a smaller amount, then it’s worth looking at different options, including:
An unsecured loan
A credit card - look for 0% purchase options
Extending your overdraft, although this can come with fees
A guarantor loan where somebody else agrees to cover your debt if you can’t make the repayments
Our expert says...
“Secured loans are a viable option if you want to borrow a large amount of money at a relatively low rate, but you need to be fully aware of the risks first.
Using your home as security means putting it at risk if your circumstances change and you can no longer repay the loan. Speak to our advisors to discuss your options and get a quote for a secured loan today.”
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Important info & Marketing claims
Think carefully before securing other debts against your property. Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.