A Secured Loan is exactly that, a loan that is secured on the remaining equity in your house, in other words, the remaining value after any debts or mortgages have been paid. For example, if your property is worth £100,000 & you owe £75,000 the realizable equity is £25,000 of which you could borrow. This situation is quite common where recent house price increases have increased the value of properties over the mortgage originally secured against it.

This gives the lender added security over a personal loan which has no security and usually results in lower interest rates & longer payment terms and is more like a mortgage.

What Can The Money Be Used For?
In most cases a secured loan can be used for almost anything, unlike a mortgage you can use it buy a new car, have that dream holiday or add value by building an extension or conservatory. Alternatively you may want to consolidate your debts, if you have large sums over numerous credit & store cards it can often work out cheaper to take out a secured loan at a lower interest rate. The payment term can be adjusted to a more realistic & affordable figure in just one payment. You must however think very carefully before borrowing money against your home, as you risk losing it if you default!

Who Is A Secured Loan Suitable For?
Secured loans are often offered to people who'd struggle to secure a standard personal loan, for example, a self employed person who has only just started would probably be turned down for a personal loan as the lender has little or no security, that is different with a secured loan. A similar case would be if you had CCJs or poor or bad credit history then you would also be considered, bear in mind though that interest rates differ depending upon your personal circumstances so always shop around & seek professional financial advice. Please be sure to visit our list of lenders to help you decide.