About secured loans
If you're a homeowner, a secured loan (also known as a homeowner loan) could be the ideal way to raise money for any purpose. Secured loans usually offer lower interest rates than unsecured loans, as well as access to larger amounts. Plus, they can often be repaid over a longer period – although this may increase the overall amount to be repaid, as they'll be accruing interest for longer.
How do I apply?
You could have a decision in principle after one free call to our secured loan specialists. They'll provide free advice and search our panel of lenders to find the best option for you, based on your circumstances. If you choose to go ahead, all the paperwork and administration will be done on your behalf, which means you can look forward to a hassle-free loan – fast.
How do secured loans work?
When you take out a secured loan, you're borrowing against the equity in your home.
Equity is the portion of your home's value that's entirely yours:
Equity equals the value of your home minus the value of any mortgages / secured loans secured against it. Don't worry if this sounds complicated, as our expert secured loans advisers can talk you through the process and advise on your best course of action.
Please note: equity isn't the only factor when it comes to secured loans. Lenders will also need to see that you can afford the repayments.
Basically, securing the loan against your home means there's less risk for the lender, as you're using a portion of your home's value to guarantee that you will repay the money: you're proving that you'll be able to repay the secured loan, as they can see that your assets are worth enough.
Secured loans & house prices
When house prices are rising, homeowners can increase their equity simply by waiting for the value of their property to increase. But when property prices are falling, many people worry they won’t have enough equity in their home to get a secured loan.
However, according to the Bank of England, in 2008 around 60% of mortgagors had at least 50% of equity in their property. They should be able to withdraw some of that equity without risking negative equity (owing more on their home than it's worth).
Plus, using equity to finance home improvements could even increase the amount of equity in your home. If you take out a secured loan for £10,000 and use it to add £15,000 to your home's value, you’ve increased your equity by £5,000.
Home improvements are just one reason people withdraw equity from their homes. If your unsecured debts are piling up, a secured loan could be a great way to consolidate them, which could reduce the interest you're paying on your debts – and the amount they’re costing you every month.
It's possible to reduce your monthly payments by arranging to repay your loan over a longer period - although this will increase the total cost, as the money will spend longer gathering interest.
The overall cost for comparison is 16.8% APR (typical).
66% of our customers get this rate or lower