Compare Secured Loans

How to choose a secured loan

If you have a less-than perfect credit rating and need access to a larger sum of money, you may be able to get a secured loan. Secured loans are also known as homeowner loans and are secured against the equity of your home. This means they provide confidence to lenders, but at the same time can be risky for borrowers.

If you decide to take out a secured loan and fail to keep up with repayments, the lender has the right to force the sale of your property in order to cover the repayment of your debt. This could mean losing your home, so it’s always advisable to consider all loan options; ensuring there is not a more suitable and less financially risky alternative available to you before committing to a secured loan.

If you think a secured loan is right for you, consider the pros and cons of this type of borrowing before committing:

Secured loans – advantages and disadvantages

Choosing between secured loan providers

If you decide that a secured loan is the right option for you, you will need to begin comparing secured loan providers. Many will require borrowers to work through a broker to source and obtain a secured loan. Therefore, you may not be able to apply for a secured loan directly with a lender, although a good broker should provide all the information you need to help you make your decision.

Although you can base your decision as to which secured loan provider to go with on how much they lend and how long they give you to pay it back, the actual amount you are offered will depend on your financial situation.

What to consider when comparing secured loan providers

• The cost of the loan: Take a look at the annual percentage rates (APRs) that lenders advertise, as these are among the best ways to gauge the cost of a loan, including interest and other fees and charges.
• The loan term: Each lender will offer different maximum and minimum loan terms, so it’s important to choose a timescale that works for you. Remember, the loan term you are offered will be affected by factors like your financial situation and your credit rating.
• The loan amount: The amount the lender will offer is obviously of vital importance when deciding between secured loan providers.
• Lending criteria: Working with a broker can help you gain a better understanding of whether you will be eligible for a secured loan before applying. Some lenders will have stricter requirements than others. It’s important to avoid applying for a loan and being rejected, as this can have a negative impact on your credit rating.

Choosing a secured loan FAQs