By definition, a secured loan is a loan where the borrower agrees to provides the lender with some form of security.
In the case of secured loans in the UK, generally the security
will be your property, regardless of whether you currently have a
mortgage or own it outright.
You can get secured loans for a wide range of amounts from about
£3,000 to £50,000 depending on the value of your home, how much
equity you have in your home and your own circumstances. Repayments are usually monthly and can be from anything for three years to
twenty five years. You may be charged a penalty if you repay your loan earlier than agreed, and you should check each lender’s individual policy with regards to this.
Lenders charge interest on the amount you borrow, which is referred to as the Annual Percentage Rate (A.P.R). The A.P.Rs quoted by the lender will usually be typical rates, and these act as a guide only as the exact rate offered will be on an individual basis
based on the amount you want to borrow and your financial
circumstances. By comparing the A.P.Rs of different loans, you
should be able to get an idea of how competitive the lender is.
Often, secured loans are much easier to obtain than unsecured loans. This is because the lender has the added benefit of security, which provides protection
if for some reason you can't repay the loan. This means that if you are self-employed, have recently changed jobs or have adverse credit
you may find a secured loan easier to obtain. They are also useful for larger amounts or
if you need a longer repayment period. But remember, a secured
loan can mean that if you do not repay your debt you can lose your
home.
