Secured loans

Who can apply for a secured loan?

Secured loans are only available to certain borrowers, as lenders need to be confident you can repay the loan and that the asset used as security is suitable. Key eligibility criteria in the UK usually include:

• Age – you need to be at least 18 years old. Some lenders may have an upper age limit at the end of the loan term.

• Homeownership – you need to own a property, or in some cases another valuable asset, to use as security. If you already have a mortgage, you might be able to take out a second-charge or further advance loan.

• Credit history – lenders will check your credit score. A good credit history can improve your chances of approval and help you secure better interest rates, though some lenders may consider applications from those with less-than-perfect credit.

• Income and affordability – lenders must ensure you can make the repayments. They will usually ask for proof of income, employment, and outgoings to assess affordability.

However, it’s important to note that meeting these criteria doesn’t guarantee approval. Each lender sets its own rules, so it’s generally a good idea to compare different providers and ensure you can comfortably keep up with repayments before applying.

Is a secured loan right for me?

Secured loans are usually suited for larger, longer-term borrowing, with repayment periods of up to 35 years.

Whether a secured loan is right for you depends on your personal finances and your ability to comfortably make repayments. Monthly payments are often lower than an unsecured loan, but a longer term can mean paying more interest overall. Your asset, such as your home, is at risk if you miss repayments.

Secured loans can range from a few thousand pounds up to £500,000 or more, depending on the lender. They’re commonly used for major expenses like home improvements, debt consolidation, or major life events.

Because the loan is secured, lenders face lower risk, which often means better rates for borrowers.

Why choose a secured loan?

Secured loans can give you access to larger sums than unsecured personal loans, often within 2-4 weeks.

Because the loan is secured against an asset like your home, lenders usually see it as lower risk. This often means lower interest rates than unsecured borrowing.

Secured loans are typically better for long-term borrowing or major expenses, while unsecured loans are usually suited to smaller amounts or shorter repayment periods.

How does a secured loan compare to remortgaging?

A common alternative to a secured loan is remortgaging your property. Like a secured loan, your home is at risk if you fail to keep up with repayments.

However, if you have a large amount of equity in your home, remortgaging can sometimes offer lower interest rates than a secured loan.

Secured loans may be quicker to arrange and more flexible, while remortgaging is usually better suited for larger sums or longer-term borrowing.