A secured loan is money you borrow which is secured against an asset you own – normally your home. You can access cheaper rates plus pay back the loan over a longer period. However, if you fail to keep up with repayments, you risk losing your home to the lender.
Secured Loans
If you’re a homeowner with available equity in your home, you have the option to take out a secured loan. A secured loan can be considered as a first or second charge.
First charge means you’ve borrowed a loan for home improvements when you don’t have an existing mortgage. Second charge involves making an agreement with your current lender or going to a different lender.
The loan is secured against the equity you have in your home, which is the remaining amount after you deduct your mortgage from the current value of your home. If you’re not a homeowner, this option won’t be available to you. Like your main mortgage, the loan is repayable over a long period of time – typically between 3 and 30 years.
You can use your secured loan for almost anything. It can be used to put down a deposit on a new home, purchase a new car, home improvements or to consolidate your debt. Once you’ve taken out your secured loan, you then make monthly repayments based on the interest charged.
The terms of your loan will be determined by certain factors, including:
- Your income
- Credit report
- Existing debt
- Current equity in your home
Where can I get a Secured Loan?
When taking out a secured loan, it would be worthwhile speaking to your mortgage lender. They may offer you a special deal if you’ve got a good repayment history.
You can ask your lender for an advance, where you borrow an additional amount of money against your home or use this method if you’re looking to do some home improvements or to put down a deposit on a new home.
You could also compare different deals and lenders on comparison websites. Keep in mind, you might not find the best deal by using a comparison site, as you’ll only find a selection of offers. Always look at the terms and conditions of every deal you come across.
The best way to get a secured loan is by using a broker. They can check your eligibility for free, without the risk of hurting your credit score. They will also search the entire market to find you the best and most affordable deal. They will take you through the process step by step, taking the time to understand your current situation so they can match you to the right lender.
They’ll give you their best advice and recommendation as to what the best option is for you, all free of charge. So, now could be just the right time to take out a loan.
For more information on secured loans or any of our other financial related service visit justmoneyuk.com or give us a call on 01325 469234.
