Secured loans

Secured Loans are a form of credit that a person can borrow against something they own,this way the lender will be able to recover any lost money if the borrower fails to repay the credit. A Secured Loan is also known as a Homeowner Loan.

Why get a Secured Loan?

The majority of Secured Loans will have a lower APR, making the loan cheaper, than a personal or unsecured loan. This is because the loan amount is guaranteed against your house, therefore the lender is risking less when loaning you the money.

If you can get a secured loan then you may be allowed to borrow more money than an unsecured loan. Due to the loan being secured against your home the bank have less chance of losing their investment if you default on repayment.

Secured Loans can be an alternative for those with a poor credit rating as it provides the lender with a reason to trust you. UK Loans would always ask borrowers to consider securing your home carefully, as your home may be repossessed if you do not keep up repayments.

Types of Secured Loans

Fixed for Term Secured Loans – Pay back the same amount of money each month for a set period of time. Helps you to budget for the long term as you will never pay anything other than the agreed amount

Variable Rate Secured Loans –The interest rate paid on the loan can fluctuate in line with the Bank of England base rate or market fluctuations. This could cause problems with regards to repayment because if interest rates increase enough it may make the repayments unaffordable. Defaulting on a secured loan could end up with you losing your house.

Short Term Fixed Rate Secured Loans – the amount of interest paid on a loan remains the same for a set period of time. After this period of time the interest rate will revert to the lenders variable rate. This could lead to an increase or decrease in the amount repaid; again, this makes it difficult to budget for.

What are the Alternatives?

For those who don’t want to secure their loan against their property because of the risk, could take out an unsecured personal loan.

UK Loans offers a Smart loan search helping customers find the best value loan for their financial situation. With just one application they have access to an  extensive panel of lenders.

As with all forms of credit, UK Loans always suggests you ensure you can afford the repayments. Take into account anything that could affect your ability to repay the loan. If you do find yourself in trouble then take a look at the websites we have listed below for you.

http://www.stepchange.org/

https://www.nationaldebtline.org

Use our award winning technology to search our panel of lenders for some of the most competitive rates.