Secured Loans

How to use a secured loan...

If you have large debts, or expense in the pipeline and nowhere else to turn a secured loan could be the answer to your prayers.

By taking some of the equity out of your property you could borrow more than you thought possible, at a handsome rate.

Making the most of your loan:

Get the right loan for your circumstances
As with most forms of loan, there are slight variations and varieties. Secured loans are no different, so it is important to choose the correct loan to suit your circumstances.

Secured loans allow you to borrow vast sums of money (£3000-£250,000!!!) and pay it back over decades rather than years. It is therefore important to get a loan with the best APR rate to suit your circumstances, or you could end up paying thousands of pounds of unnecessary interest.

All lenders base their rates on different circumstances. One company may offer great rates for those customers with good credit scores, but limited equity, whereas another company could offer a better rate for the exact opposite. Fortunately, ChooseMoney has amalgamated a range of secured loan lenders and their rates right here, to help you decide what's best for you.

Borrow as little as possible
With all this untapped potential cash awaiting you at the scribble of a pen, and an eager salesperson at your side, it's all too easy to get captivated in the moment and borrow that bit extra.

That 'bit extra' is more than likely to be frittered away without you even realising what you've spent it on and end up as another slice of interest to repay.

Draw up a plan of what you need money for and not what you want the money for!

Things to watch out for:

Early repayment stitch up
Secured loans are very rigid in their capabilities and usually forbid overpayment, which they can even charge fines for, known as Redemption penalties.

Bank of England base rate
In contrast to unsecured loans, which generally offer a fixed rate, secured loans will fluctuate their rate in line with the Bank of England base rate.

Make sure you factor this into your repayments as much as possible. Could you afford the repayments if the rate increased dramatically? If the answer is anything less firm than 'yes', it would be wise to think twice before getting one of these loans.

Compare secured loans