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If you are a homeowner looking to raise money then a secured loan may be the answer, usually used to borrow larger loan amounts secured loans range from £3,000 up to £100,000 and can be used for almost any purpose, including carrying out home improvements.
A secured loan is similar to a second mortgage, a loan that is secured on your property which means if you miss repayments on your loan then your house may be at risk of repossession, this means that a secured loan should not be entered into lightly and you need to consider carefully if this is the best option for your circumstances.
The amount that can be borrowed, the term available and the Annual Percentage Rate (APR) will depend on:
the value of your property
your ability to repay the loan
your personal circumstances
A secured loan often allows you to borrow more and repay over a longer period than a unsecured personal loan with terms up to up to 25 years. They can normally be used for almost any purpose may be available to people who have been turned down for an unsecured loan. Borrowers who are self-employed, have recently changed jobs or have previous credit problems who also have problems getting finance may also be considered for a secured loan, making them an option for tradesmen. They are also useful for borrowing larger sums or where the applicant requires a longer repayment period.
The majority of secured loans are granted via a finance broker although there are some lenders who will lend directly to the general public. When you apply for a secured loan your loan application will be passed to an underwriter who will examine your application and search for secured loan plan from there panel of lenders, different loan brokers will have access to different lenders and loan plans. A secured loan can be an alternative to remortgaging helping you avoid those early repayment charges or losing a low rate that you may not be able to get again because of your circumstance or changes in the economy and interest rates.
The secured loan is designed as long term finance, the process of getting approved for a secured loan can take up to six weeks, most secured loan lenders require detailed information on your income and expenditure, as well as carrying out a valuation of your property to determine your loan to value.