A secured loan requires the borrower to provide the lender with some form of security, usually the borrower's property (whether or not it is mortgaged or owned outright). When a loan is secured against property that is already mortgaged, the loan is known as a second charge, whereas a loan secured against a property owned outright (with no existing mortgage) is known as a first charge. Secured home-owner loans are available for virtually any purpose, including debt consolidation. The amount borrowed usually ranges from £3,000 to £50,000, although some lenders will consider lending up to £100,000. The repayment term is agreed at the outset, commonly between 3 - 25 years. You may be charged a penalty if you repay your loan earlier than agreed (individual lenders each have their own policy so check for details). You will pay interest on the amount you borrow, referred to as the Annual Percentage Rate (APR). The total amount you can borrow, the term available and the APR will all depend on your individual circumstances, including the available equity in your property, your ability to repay the loan and your personal financial record, including any previous adverse credit. You may be able to borrow up to 125% of the property value (subject to your circumstances).

Secured loans are usually easier to arrange than unsecured loans, because the lender has the benefit of security, which helps protect against your inability to repay. This allows the self-employed, or people that may have recently changed jobs or who have adverse credit to take out a loan. They may also be used for higher amounts or where the applicant requires a longer repayment period.
All lenders will insist that where an applicant is married, both parties should be named on the application form.

Credit Scoring
To assess your suitability, most lenders will use a system of ‘credit scoring’ and credit reference agencies. Credit scoring assesses your personal circumstances and statistics to determine which broad category of borrower you fit in to. Credit reference agencies provide a detailed record of your financial credit history, any adverse credit and any existing commitments plus provide address and electoral roll information. If you are refused a loan or wish to make enquiries concerning your own credit file you can apply for a small fee to the credit reference agencies for a copy of your credit file.

Consumer Credit Act 1974
Loans up to £25,000 are to the Consumer Credit Act 1974 which contains strict regulations about how money is lent. Loans for sums greater than £25,000 are unregulated. You will need to sign a credit agreement, which should be read carefully as the terms are binding. For regulated loans of under £25,000 the lender must provide a consideration period of 7 days. The lender will offer insurance policies and payment protection schemes to cover your monthly repayments in the event of accident, sickness, unemployment and death (conditions apply).

If you would like us to find you a secured loan that suits your circumstances then please complete the enquiry form and we will contact you.