Secure the right homeowner loan
Why choose us?
- Personalised to you
- Eligibility checks that don’t affect your credit score
- Search comprehensive panel of leading lenders
What is a homeowner (secured) loan?
A homeowner loan, also known as a secured loan or second charge mortgage, is specifically designed for homeowners.
Your property is used as security and acts as a safety net for the lender. This means you’re likely to get approved – even if you have a less-than-ideal credit score.
Second charge mortgages from 5.1% APRC. Second charge mortgage representative example (if you choose to add fees to the loan).
12.28% APRC Representative (variable)
Representative example (if you opt add fees into the loan): Assumed borrowing of £25,000 over 7 years, plus a broker fee of £2,850 and lender fee of £367.50 would result in monthly repayments of £492.68, the borrowing rate is 10.8%, the APRC is 12.28% (variable), total charge for credit would be £13,167.57 and the total amount payable would be £41,385.07.
What can I use a homeowner loan for?
You can spend a homeowner loan on a major expense or put it towards a handful of different purposes - the choice is yours. We find the most common reasons people take out a homeowner loan include:
Large home renovations - the money could be used to pay for a new bathroom, conservatory or loft conversion, for example.
Consolidating multiple debts - If you’re juggling several debt repayments, you could take out a homeowner loan to pay off all those existing debts, so you only need to make one payment each month. Just remember, extending the term could mean you end up paying more interest overall.
Are you ready to find out if you’re eligible?
See if you qualify by completing this short form:
Frequently Asked Questions
What is a secured loan?
The Definition of a Secured Loan
A secured loan means that you can borrow money secured against an asset that you own. Secured loans are taken out over a fixed period of time, in which you agree to pay back the loan. Failing to do so, or defaulting on the loan, may result in the sale of the asset in order to recoup any losses.
What are secured loans for?
Secured loans help you borrow large sums of money against something you own, using it as collateral. They are often used for major expenses, such as large-scale house improvements or debt consolidation, and can be taken out over a long period of time. If a secured loan is taken out against your property, you are agreeing that, in the case that you can’t pay off the loan, you may need to sell your house to make the payment. Likewise, if you used your car as an asset, it may be repossessed if you don’t keep up your repayments. Lenders may see secured loans as lower risk because they know they can collect the money you owe from your assets if you don’t make the repayments.
Because of this security, secured loans may come with better interest rates and longer repayment terms. This can mean lower monthly repayments compared to an unsecured loan. As with all borrowing, you should consider the total amount you will need to repay overall when considering a product. The amount you are able to borrow and the rate that you are quoted by the lender will depend on your circumstances as with all loans, but with a secured loan, the amount of equity you have in your property will also affect this. If you are a homeowner but your credit history is not perfect, you might find that you are offered secured loans.
How long will it take to process a secured loan?
Applicants can complete the secured loan process fairly quickly if you can provide all the information efficiently and accurately.
After you’ve made your secured loan application, you’ll normally receive a quotation that requires both validation and confirmation by your lender. If you decide to take the next step, then your lender will assess your credit report.
If the loan you want is secured against your property, then the lender will want to know its value. In essence, they need reassurance that the amount of equity (another word for ‘worth’ or ‘value’) you have in your home covers the amount of the loan.
With the secured loan process, you may also need to supply banking details and other financial information. This process varies from lender to lender but can take several weeks. You can always ask for an estimated time at the point you decide to proceed.
I have taken out a secured loan, but I’m moving – will this be a problem?
Not necessarily. There are a few options with a secured loan when moving house.
- The first option is to see if you have enough money from the house sale to repay the debt in total.
- The second option is to transfer the loan to the next house you’re moving to. It’s important to note that not all lenders will allow it.
What is the difference between a secured loan and an unsecured loan?
When looking to borrow money, it is important to understand the difference a secured or unsecured loan and why you might want one.
Whether you are looking to purchase a new car, wanting to consolidate debt, or take out a loan to renovate your home, both secured or unsecured loans could be an option.
The decision will depend on your personal circumstances and various factors that you need to consider.
Secured Loans
- Require an asset to secure the loan against —usually this is your property in order to get a secured loan
- Tend to be for larger amounts.
- Tend to be over a longer period of time.
- Can result in lower interest rates.
Unsecured Loans
- Do not secure the loan against your assets.
- Typically these are for smaller amounts ranging from £1,000 – £35,000
- Tend to be for a shorter period of time.
- Interest rates may be higher than a secured loan
How to know if a secured or unsecured loan is right for you?
When looking at a secured loan vs an unsecured loan, there are several things to take into account.
If you’re looking to borrow from £500 to £35,000 then an unsecured loan could be an option for you. With an unsecured loan, you don’t need to secure the loan against an asset, like your home. The lender will simply lend you the money, and you’ll repay it in regular monthly instalments, plus interest. For this reason, unsecured loans are quicker to set up than secured loans and you could have the money in your account the same day.
The rate you are offered for an unsecured loan will depend on your credit score and individual circumstances. You can use an unsecured loan for any legal purpose, such as consolidating your debts, making home improvements, buying a new car or spreading the cost of a holiday or wedding. Unsecured loan repayment terms range from 1 to 7 years.
To be eligible for a secured loan (or homeowner loan), you need to be a homeowner. This is because the loan will be secured against your property, meaning the lender can take your property to recover their costs if you can’t repay what you owe.
Secured loans are used to borrow larger sums of money than unsecured loans, with loan sizes ranging from £5,000 to £500,000+. This is why the lender requires the loan to be secured against an asset. With a secured loan loan, you can receive advice from a qualified adviser on which loan option is before for you and your circumstances, as well as benefit from much longer repayment terms, ranging from 1 to 30 years.
The most common uses of a secured loan are to consolidate debts or make home improvements, however they can be used for any legal purpose. Although your credit score does impact the rate you’re offered for a secured loan, there are also other factors involved such as the amount of equity you have in your home.
Choosing the Right Loan for You
Which type of loan is right for you will ultimately come down to what’s best for you and your circumstances. You may prefer to opt for your lowest rate loan offer knowing it is the cheapest option. However, you may want to lower your monthly repayments by spreading your costs out over a longer period of time. Although this means you’ll pay back more overall, it could make your day-to-day costs more manageable. Finally, you may simply decide to go for the loan option that you’re most eligible for to reduce the chance of having a credit rejection recorded on your credit file. Whatever you choose, just make sure it is the right decision for you.
Before agreeing a loan, it is absolutely vital to make sure that the secured or unsecured loan you go for is right for you. If you would like independent advice, it is possible to contact Money Helper. Money Helper is an independent service that offers free, impartial advice. Call 0300 500 5000 or visit the Money Helper website.
Second charge mortgages from 5.1% APRC. Second charge mortgage representative example (if you choose to add fees to the loan).
12.28% APRC Representative (variable)
Representative example (if you opt to add fees into the loan): Assumed borrowing of £25,000 over 7 years, plus a broker fee of £2,850 and lender fee of £367.50 would result in monthly repayments of £492.68, the borrowing rate is 10.8%, the APRC is 12.28% (variable), total charge for credit would be £13,167.57 and the total amount payable would be £41,385.07.