Secured Loans

A secured loan is a loan which offers the consumer the chance to borrow money against an asset they own, usually their own home.

The loan is secured because you are borrowing the money against the security of your asset, which simply means that if you fail to keep up repayments, your asset could be seized and sold to fund the debt.

Most secured loans are secured against a home, both with and without a mortgage, and are also known as home owner loans. Whilst loans will be offered to homeowners with a mortgage, those homeowners will have to show they have sufficient equity in their home that could be reclaimed by the lender should they default on their loan.

This type of loan is also known in the industry as a second mortgage, and can usually be used for anything you want but will be subject to the same repayment terms as the original mortgage.

Secured loans are offered by a huge variety of companies, including the usual suspects in banks and building societies. Large finance companies also offer deals, including specialist and often more expensive offers for those who have bad credit.

Interest rates on secured loans tend to be lower than those offered on unsecured loans, because the lender has something to fall back on if the consumer fails to keep up with their repayments.

Consumers taking out secured loans must be aware that borrowing money against your own home leaves you at risk of losing your home should you fail to keep up repayments of that loan.

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