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Secured Loan

Home – Secured Loan

Secured Borrowing Explained

OVERVIEW

What Is a Secured Loan?

A secured loan is a type of borrowing that is backed against an asset you own—most commonly your home.

Because the loan is secured, lenders usually offer lower interest rates compared to unsecured loans. However, this also makes it a higher-risk option, as your asset could be repossessed if you fail to keep up with repayments.

How Secured Loans Work

Secured loans are typically used for borrowing larger amounts, often £10,000 or more.

  • The loan is secured against your property or valuable asset
  • This reduces the lender’s risk, resulting in more competitive rates
  • If repayments are missed, the lender may repossess the asset

Types of Secured Loans

Homeowner (Equity) Loans

  • Borrow against your home for improvements or deposits

First Charge Mortgages

  • Used when there’s no existing mortgage

Second Charge Mortgages

  • Additional loan alongside your current mortgage

Debt Consolidation Loans

  • Combine debts into one payment (secured or unsecured)

Home equity or homeowner loans

You may be able to get a further advance on your mortgage – you borrow an additional amount of money against your home from your current mortgage lender.
This might be a useful option if you’re looking to pay for some major home improvements or to raise a deposit to buy a second home.

First and second charge mortgages

A first charge mortgage loan involves taking out a loan when you have no existing mortgage.
A second charge mortgage involves setting up a separate agreement from your existing mortgage, either with your existing mortgage lender or by taking out the loan with a different lender.

Debt consolidation loans

If you owe money on a number of different products, you can merge them together into one debt consolidation loan. This might be secured or unsecured.
Debt consolidation loans secured on your home could be either first or second charge mortgages.

What client says about us

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