Secured loans are loans which require you to put up a security in the form of an asset, such as your home, or a property you own. This is why secured loans are often known as homeowner loans and even second charge mortgages.

In the event that you’re unable to repay your secured loan, the bank or lender can repossess your home to recoup the money you borrowed by selling it. This is why you should always be careful before securing debts against your home. Make sure you have a repayment plan in place so you don’t miss any payments.

A secured loan allows you to borrow more for longer than you would be able to with a personal loan. Depending on the value of your home, lenders can lend between £1,000 to £2.5 million.

How to get the best secured loan?

While there isn’t a single best homeowner loan you can opt for, you can improve your chances of getting the best deal if you compare secured loans before you speak to a broker.

The table above gives an idea of secured loan rates being offered by various lenders.

To find the best secured loans deal for you, you need to understand that secured loan rates are based on your specific financial circumstances

A useful way to get the right secured loan for you is to speak to a qualified broker. That’s because most lenders who offer secured loans, UK wide, only work with brokers.

What to do before you speak to a broker

A broker can help you find the ideal homeowner loan for your needs by taking into account your individual financial circumstances.

This is why before you consult a broker, think about the following things:

  • How much you want to borrow

  • How long you need to pay it back

  • The value of your property

  • Tow much equity you have in your home

  • Other debts that you owe.

A broker will then find you a secured loan by calculating your affordability based on the answers you provide.

How much do secured loans cost?

Much like most loans, the main costs of a secured homeowner loan are:

  • Interest: The interest rate you are offered will determine your monthly payments and the amount of interest you pay overall in addition to paying back the original amount you borrow. Speaking to a broker can help you find the best secure loan rates for your specific financial circumstances.

  • Fees: As with any loan, there are fees that come attached with your loan. These can take the form of arrangement fees, broker fees, or early repayment fees. Even though brokers charge for their services, they can help in finding you a deal that keeps these costs to a minimum.

Using our secured loan calculator, you can work out how much your repayments will be. You can find out more about how homeowner loans work here.

Should you get a secured loan?

Getting a secured loan is a major financial decision that can put your home at risk.

Nevertheless, secured loans do give many people the opportunity to borrow more than would be possible with a personal loan or credit card i.e. over £25,000. This could be to fund home improvements that may add value to the house. Or to finance a family wedding.

Alternatives to secured loans

If you’d rather take a different route with your borrowing, you could also consider:

Equity release: Some homeowners might like to think about choosing equity release, rather than a secured loan. This means the lender pays you either a lump sum or a regular payment, in exchange for a percentage of your home. The lender gets its money back when your home is sold.

Second charge mortgage: Second charge mortgages are a type of secured loan.

Instead of remortgaging or taking out a personal loan, a second charge mortgage lets you use the equity you have in your home as security. The equity in your home is the percentage of the home owned outright by you.

When you get a second charge mortgage you’ll have two mortgages: one on your home itself, and one on the equity in your home.

Often it can be an alternative to remortgaging if you need to raise some cash.

It’s important that you fully understand the risks. As it’s a loan secured by property, you risk losing your home if you can’t make the repayments.

Can you get a secured loan with bad credit?

If you’re a homeowner with bad credit, you can still get a secured loan.

Speaking to a mortgage broker can help you find the right secured loan, without having to go through several credit checks that can hurt your credit score.

You can compare secured loans for bad credit here.