Loans Choice
www.loans-choice.org.uk
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Secured Personal Loans
These loans are usually secured against your house. For this reason they are sometimes known as homeowner loans. If you want a speedy secured loan or just want fast service from a lender always supply the details required as fully as possible. Remember also that if you default on repayments you may lose your home. If you need a bad credit secured cash loan in the uk please read our Bad Credit Loans page first.
Although secured loans are mostly secured against a house you can also get a "log book loan". See below for details.
The amount you can borrow depends on how much equity you have in your property. If you have no mortgage and you own your house outright you may be able to borrow up to 125% of its value. However, if you have only just bought your house and have paid the minimum deposit required by the bank or building society you will have very little equity and the amount you can borrow against it will be much reduced.
Personal secured loans can be used for most purposes such as to buy a car or for home improvements. Because these loans are secured, the rate of interest charged should be lower than that for an unsecured loan and the lender will be more willing to lend to the self-employed.
Most lenders, in their advertisements, will quote a "typical" interest rate. The rate you are actually charged will depend on your ability to pay, other outstanding debts, and your credit rating, i.e. whether you have CCJ's or not. So in practise, most secured loans are still limited to a range between £3,000 and £50,000.
If you own your home outright, any loan secured on it will be in the form of a "charge" over it. This means that the lender can have a claim over the amount of the charge if the property has to be sold because you have, for example, defaulted over the monthly repayments. If your house is mortgaged, the mortgagor has a first charge over your house so the company servicing your loan will take out a second charge.
Repayment periods can be as little as three years or as long as twenty-five years. The term is agreed at the beginning of the contract. Please note that if you are married, you and your partner must both be named in the application.
Log Book Loans
As an alternative to using your house as security you can use your car instead. Obviously your car has to be a good one and reasonably new and you will not be able to borrow more than the car is worth. The lending company will hold the "log book" or more correctly the registration document (V5), but you can keep driving as before. However, remember that if you default on the repayments, you will lose the car.
If you are looking for bad credit unsecured loans please also read our Bad Credit Loans page.
Hints
- Remember that the loan is secured against your property. It may be repossessed if you fail to keep up payments that are secured on it.
- Loans under £25,000 are regulated by the Consumer Credit Acts. These give you, the borrower, much greater security so be warned if you intend borrowing amounts larger than this.
- Secured loans usually have lower interest rates than unsecured loans.
- There may be penalties if you repay the loan early.
- To get a speedy secured loan or the fastest response from a lender always answer all questions as fully as you can.