Our award winning experts at Smart Money can search and compare 19 lenders from the market to find you the cheapest and best deal to match your financing needs. Quotes and personal illustrations are free from their Cemap qualified advisors.
How to compare secured loans in the UK
There are a wide range of reasons why you might consider taking out a secured loan, some of which are property improvements, paying for a wedding, a new car, or perhaps you are looking for a secured debt consolidation loan some of your existing debts. If you need to be a homeowner to take out this type of loan as the loan is secured against your property in the same way a mortgage is. These types are loans are also popular with landlords and property investors who wish to raise extra money against their buy to let properties. Most second charge lenders in the market offer buy to let secured loans alongside there residential home loans. Our experts compare the market place to find not on the cheapest rates, but to find the right lender for your circumstances.
Is credit history important?
Your credit score is important to get the best secured loan deals
Basically credit history is very important when it comes to getting the best deal. If you are borrowing on a secured loan in order to provide you with the funds to do something important and you have a good credit score you can get loans that attract interest rates around 4-5%. This is approximately in line with many standard variable rates offered by second charge lenders. This interest rate indicates that you are seen as a relatively low risk borrower and so you are given the benefit of a low interest rate. Despite the lower interest rate you will have to ensure that the repayments are affordable on top of your mortgage payments.
Secured loans for bad credit comparison
If you have a bad credit history you will find that you have fewer options and that you are also going to have to pay your loan back with a higher interest rate. The most competitive rates available for people with bad credit ratings come in at around 9%, but you may have to be prepared to pay up to 19% on your secured loan if you have particularly poor financial circumstances such as a history CCJ’s, defaults and missed credit payments. If you are unsure then a broker can quickly assess your application and provide a non obligation quote at no charge.
This calculator will give you an idea of costs. The exact amount and APR payable will be provided from the lender subject to credit and affordability checks.
Your monthly payment will be:
Interest on this loan will be:
Annual Percentage Rate (APR):
Total repaid will be:
Comparing secured loans can be relatively easy by using an online secured loan calculator like the one here, where you are able to calculate monthly loan repayments, interest charges and fees. It is important to consider that without investigating the details of each one you may not be fully aware of all of the requirements and criteria that go along with each one. Therefore although you can get an idea of available loans by searching, you will get a much more in depth understanding of your options if you choose to consult a broker who can provide you with an accurate quotation.
Which direct lenders and UK companies can you compare against?
We have access to the majority of the lenders in the UK market and direct relationships and some exclusive rates with the most well known second charge brands in the marketplace. We can compare loan rates from the the following lenders:
What can I use a secured loan for?
You can, in theory, use a secured homeowner loan for anything, but you should be aware that you will have to explain your loan reason to your lender. Common uses for a homeowner loan is to carry out improvements to your home, or alternatively to consolidate a number of debts into a single debt that you can then afford to repay over a longer repayment period. £30,000 loans and above are the most popular amount borrowed over 20 years.
How does a secured debt consolidation loan work?
If you have a number of smaller loans, credit cards or an overdraft you wish to pay off then you can do this with a larger secured loan. The lender will consider your loan application for debt consolidation purposes. In many cases the lender will need to know which loans you wish to pay off and the loan amounts, then on completion of the loan they will forward cheques made out in the name of the creditors which you must then use to pay of and clear these debts. The loan will only be approved on the basis the funds will be strictly used for debt consolidation only.
Why use a secured loan broker?
A broker has specialist knowledge of the market place
Using a broker to find a loan might seem like a slightly strange idea but basically any loan you take out using your home as collateral is effectively a type of mortgage. Therefore when you are considering taking out a secured loan on your home a secured loan broker is well placed to advise you, not only on available products, but also about any potential issues that may come up through your mortgage or second charge lender. They will be able to assist you with any applications and by having an experienced broker involved in the process can actually increase your chances of being successful in your loan application especially if you are self employed or your application is more complex.
A good broker can also help the process along, particularly if you require a debt consolidation loan or your circumstances are not standard and the application process takes longer than you thought.
What are the risks?
When you are comparing secured loans you will need to remember that any loan you take out will be secured against your home. This means that should you fail to keep up with your loan repayments, as well as your mortgage repayments, your home will be at risk of repossession. Therefore you need to take the time to make sure that you know what your repayments will be for each of the products you are considering for the interest rate that is given. This is something else that your broker will be able to do for you.
You will also have to consider the effects of the length of your loan term. A shorter term means you will pay off your loan sooner and you will pay less interest overall, but your payments will also be higher and so therefore more risky. Therefore to properly compare loans you have to balance the loan term with your financial situation.
Questions? If you’re unsure which loan is right for you or you need some guidance on secured loans then speak to our experts on 0161 820 8099.
Their friendly advisors will be happy to discuss which options are available and to answer any questions you may have.
Smart Money Why?
This provider is our Expert’s Choice in its category as it won tops marks for the following.
- EXPERTISE & KNOWLEDGE
- CUSTOMER SERVICE
Learn more about how we review and assess the providers here on Lending Expert.
£10,000 - £1,000,000
3 - 35 years
& Buy to Let
Lender Website URL
Max LTV 100%
Award winning broker of the year Smart Money have made it to the top of our list as our No 1 recommended provider for homeowner and buy to let loans. They are independent and have access to the major lenders in the market. All quotes are free and without any obligation.
Representative example: Assumed borrowing of £29,095 over 120 months, with a fixed borrowing rate if 4.4% per annum for the first 60 months, followed by 60 months at the lenders standard variable borrowing rate of 4.05%. There would be 60 monthly instalments of £300.14 followed by 60 instalments if £295.00. Total amount payable £36,016.20 comprised of; loan amount (£260,000); interest (£6918.20); Broker fee (£2600) Lender fee (£465). This would result in an overall cost of 7.1% APRC