Secured loans explained
Secured loans (also known as homeowner loans) allow you to borrow a large sum of money, usually upwards of £25,000, using your home or other major assets as collateral against the repayments.
Though secured loans are not to be entered into lightly, Solent Financial Services can work with you to develop a realistic and affordable repayment plan and help you to find the secured loan that is right for you. We will also advise you if we do not think a secured loan is the right product for you.
Why use a secured loan?
- Personal loans are usually only available up to £25,000 so a secured loan is a good option if you require a larger sum of money – as long as you have a realistic repayment plan.
- Secured loans can be useful for home improvements or extensions because you will add value to your property which can be recouped when you sell.
- Secured loan interest rates are usually lower than for unsecured loans (such as credit cards or smaller, personal loans) because they’re borrowed over a longer term.
- If you are paying high interest on various unsecured debts such as credit cards, getting a secured loan to consolidate all your debt could reduce your monthly outgoings and simplify your finances. Secured loans can transform your repayments into one highly visible, manageable, fixed schedule. However, you should be aware that you may be extending the terms of your debt and increasing the total amount you repay.
- As this type of loan is secured against property, they offer security to lenders, meaning that people with poor credit history are more likely to be able to gain a secured loan than an unsecured loan.
How we can help
We can help guide you through the qualification criteria for a secured loan. As a starting point, a credit history (even if less than perfect), a steady address and a realistic payment plan are minimum requirements. You normally need to have been a UK resident for at least three years.
We can then find the right secured loan for you and ensure you enter into any applicable process fully aware of the requirements upon you, hidden costs and the different loan options available.
You should not enter lightly into the decision to take a secured loan, because loans secured against property mean you put that property at risk if you can’t meet the repayments, with repossession being a worst-case scenario. Call us on 01489 808690 or contact us to learn more.
We advise all clients to think carefully before securing further debts against their home.