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Secured Loans

Compare secured loans with no impact to your credit score

All about secured loans

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What are secured loan?

When you take out a secured loan, you borrow money against one of your assets – usually your home.

What’s the difference between a secured and an unsecured loan?

Work out how much money you need to borrow and select a suitable repayment term. You could choose to use a credit broker to compare secured loans, or apply directly with a lender.

How do secured loans work?

Work out how much money you need to borrow and select a suitable repayment term. You could choose to use a credit broker to compare secured loans, or apply directly with a lender.

If your application is approved, be sure to read your loan agreement carefully before signing so you know exactly what your repayments are and when they are due. You should also familiarise yourself with any fees you could be charged if you miss or are late making a repayment.

Pay back the loan in monthly instalments. Be sure to make the repayments in full and on time each month or you risk losing your collateral.

What should I look for when comparing secured loans?

Interest rates

Remember, you may not necessarily be offered the advertised Annual Percentage Rate (APR). The interest rate you are personally offered depends on a number of factors, including your credit score.

The loan term

Generally, longer-term loans may have lower monthly repayments, but you may pay more in interest over the duration. It all depends on what works best for you. If you’re looking to spread the cost of a large purchase, you may opt for a longer term; or maybe you’re happy to repay your loan quicker and save on interest.

Repayments

Before you sign your credit agreement, be sure that you are able to make the monthly repayments comfortably. This is especially important for secured loans, as failing to make your repayments could result in you losing your home.

Who can check their eligibility for a secured loan?

Each lender will have their own criteria, but generally, to check your eligibility for a secured loan, you must:

Be over the age of 18. For some lenders, the minimum age requirement for applications is 21 years old.
Have a UK address. Some lenders may also require three years’ worth of UK address history.
Have a UK-issued bank account with a valid debit card;
Have a minimum annual income of £5,000; and
Have a UK address; and
Be employed with your income paid directly into your bank account.

Frequently Asked Questions

Do I need to have a good credit score to apply for a secured loan?

When it comes to applying for loans – both secured and unsecured - the better your credit score, the more options you may find available.

Having a good credit score may also mean that you are offered better rates of interest.

Can I pay my secured loan off early?

Some lenders may allow you pay your secured loan off early, although bear in mind that you may be charged an early repayment fee. You should refer to the terms and conditions of your loan for further information.

Will a secured loan affect my credit score?

Secured loans – like all financial products - can affect your credit score.

If you make your repayments on time each month and pay the loan off before the term expires, you may notice an increase in your credit score.

On the other hand, your credit score may suffer if you experience difficulties in clearing the balance of your loan.

I’m struggling to make the repayments on my secure loan. What can I do?

You should contact your lender as soon as possible. We understand that this can be worrying, but it is the first step towards taking back control. Your lender will work with you to find a solution.

You can also find free, impartial advice on money and debt management on various sites, such as MoneyHelper, StepChange, National Debtline and Citizens Advice Bureau.