Is a Secured Loan Right for Me?
A secured loan can be an effective way to borrow large sums of money, whilst secured against your home, flat or property that you own.
You will be using your home as a form of security and by leveraging its value, this will help you borrow large amounts and for longer – for purposes such as home improvements, a wedding or to consolidate your debts.
Depending on the value of your home, you could borrow over £1 million and repay over 1 to 30 years. However in the event that you cannot keep up with repayments, the bank or lender can repossess your home to recover the money they have lent to you.
Why Compare Secured Loans with Lending Expert?
Lending Expert is a specialist secured loans broker, working with the whole of the market to help you compare the best rates, loan amounts and repayment options from all the secured lenders in the UK.
With rates starting from 3.34% APRC, the interest rates and loan terms can vary between lenders and when you are taking out a large loan and secured against your home, you want to make sure that you are getting the best deal possible.
As a price comparison site and broker, we do not take any fees for applying and checking your eligibility with our lenders will not impact your credit score. We are proud to offer a clear, transparent and effective way for borrowers to compare secured loans.
How Do You Get the Best Secured Loans Rates?
- Loan-to-value ratio – the more equity you have in your property, the more you should be able to borrow.
- Your financial position – with a stable income, employment and good credit history, this should allow you to access cheap secured loan rates and maximise the amount you can borrow.
- Value of your property – if you have a valuable property, this could help you access a large sum and competitive rates
- Debt-to-income ratio – if you are not overloaded with other financial obligations in terms of credit cards and loans, this will help you get lower rates
- Beware the advertised APRC – this is only available to 51% of successful customers and your rates may vary depending on factors mentioned above
- Borrow £1,000 to £1 million (or higher)
- Rates from 3.34% APRC
- Loan terms: 1 to 35 years
- Secured against a property or home
- Subject to property valuations
- Funding available in matter of weeks
- Online application
- Arrangement fees may apply
- All credit histories considered
What Are Types of Secured Loans and What Are They Used For?
Homeowner loans – Most secured loans are taken out by homeowners who are looking to raise money against their property or home. This is usually known as a ‘second charge,’ since it is the second priority against your property after your first charge, which is your mortgage. This can be used to pay off bills, for gifting money to your relatives, debt consolidation or home improvements.
Debt consolidation loans – This allows you to take all your existing financial obligations (such as credit cards, loans, student debt) and put them into one single, more convenient monthly repayment schedule, repaid over 1 to 30 years. You can borrow up to £25,000 (or higher) and this is secured against your home.
Bridging loans – This is used by homeowners to bridge the gap between the purchase on one property and the next. Perhaps you cannot sell your property, but are keen to purchase another.
This type of loan allows you to receive the money upfront so you can buy the desired property and then you can repay the loan in full once the original property has been sold.
It is also commonly used by property developers to purchase properties at auction or under tight deadlines whilst avoiding property chains and long mortgage applications.
Second charge loans – This is where you borrow money against your home and it is the second charge from your bank account, after your mortgage takes the first charge or first priority of payment. The amount you can borrow from a second charge loan is a little less than your main mortgage, since the lender is now second in line when it comes to payments. However, you can still borrow quite a substantial amount – £1,000 to £1 million depending on the value of your property. This can be used for consolidating debts, home improvements, business purposes, holidays or school fees.
Equity release – Equity release allows you to unlock money that is currently tied up in your home. Targeted at the over 55 market, it refers to the ‘releasing of equity’ after you have been paying your mortgage for years and years and now own all or most of your property. You can use equity release to get a large sum of money upfront, which is tax-free and to continue living in your house.
You can typically choose to release anywhere between 20% to 90% of the value of your home, deciding to remain owner of the property (lifetime mortgage) or give up equity in the property (home reversion) until the lender recovers it when you die or go into long term care.
Which Secured Loan Lenders in the UK Do You Work With?
What To Consider When Applying for a Secured Loan
When you get a quote for a secured loan, start by thinking how much you need to borrow. A lot of UK customers use secured loans for debt consolidation, which is to pay off a number of existing debts such as credit cards and loans and putting them all into one single repayment format. In this case, it is worth calculating all debts and finding out how much interest you owe and for how long and applying for the right amount for you.
Consider the interest rate that you will be charged and the length of the loan – since the longer that you will need to borrow for, the more interest that will continue to add up year-on-year. So finding a low rate and just the right amount of time to borrow for, will help you get the best deal possible.
Be sure to take note of any additional loan or arrangement fees that can often come with a secured loan, including property valuations or solicitor fees, arrangement fees, broker fees or fees of early repayment. Being aware of these can help you save money during the loan application and funding process.
What Are The Risks Involved?
Since the loan is secured against your home, your property is at risk of repossession if you fail to keep up with repayments. When your loan is approved, you are receiving a large sum initially upfront and if you cannot repay it, they will have to take ownership of your home in order to recover their fees.
The lender will usually take a number of steps to help you repay your loan if you are facing difficulty and this may involve different repayment plans or arrangements. Repossession is usually the last resort.
With this in mind, it is important to understand the repayment terms and potential risks and Lending Expert is on hand to help you get the best rates and terms possible.
What Information Will I Need When I Apply for a Secured Loan?
- Estimated value of your property
- Estimated equity in your property
- Value of any other outstanding debts that you owe
- Decide how much you wish to borrow
- Decide how long you need to borrow for
- Monthly income
- Email address and mobile phone number
Can I Apply for a Secured Loan with Bad Credit?
Yes, you can apply for a secured loan with a bad credit rating and this type of loan is popular for people with poor or adverse credit histories.
When applying for unsecured loans, your loan approval is based on your income and credit rating. However, with secured loans, the value of your property and your equity in that property can largely determine the amount you can borrow and the success of your application.
So despite having a less than perfect credit score, if you have a valuable home, flat or property, you can still get the funds that you need – and the range of lenders working with Lending Expert are here to help and willing to take a view of all different credit histories.
How to Apply with Lending Expert and Get a Free Quote
Use our comparison table provided to compare rates and terms from over 18 secured lenders that we have partnered with.
Once you have selected the lender of your choice, click on ‘check my eligibility’ where you will be taken to our form and can enter a few basic details. Our secured loans broker team will review your information and come back to you with the best options tailored to your requirements.
At Lending Expert, we proudly charge zero fees for applying, with no impact to your credit score and you can guarantee that we will keep your information and not share this without your permission.