Top 5 Secured Loans | Homeowner Loans | Compare Now

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Compare The Top 5 Secured Loans

See our impartial guide to choosing the right deal

1

Basik Money

Loan Amount

£9,000 to £3m

Loan Term

1 year to 35 years

Representative APR

7.8%

Assumed borrowing of £37,700 over 180 months, with a fixed borrowing rate of 6.4% per annum for the first 36 months, followed by 144 months at the lenders standard variable borrowing rate of 5.9%.

There would be 36 monthly installments of £356.89 followed by 144 installments of £347.59. Total amount payable £63,021 comprised of; loan amount (£37,700); interest (£21,791); Broker fee (£3000) Lender fee (£530). This would result in an overall cost of 7.8% APRC.

2

Ocean Finance

Loan Amount

£10,000 to £250,000

Loan Term

1 year to 25 years

Representative APR

7.8%

Representative Example If you borrow £29,000 over 13 years at an annual interest rate of 7.8% (variable) you would make 156 payments of £331.76 per month. The total amount of credit will be £22,754.56. The total amount repayable will be £51,754.56 (this includes an average Lender fee of £495 & Broker fee of £2,975).

The overall cost for comparison is 10.4% APRC Representative. Subject to status, the actual rate will depend on your circumstances.

3

Loans Warehouse

Loan Amount

£1,000 to £15,000

Loan Term

1 year to 5 years

Representative APR

10.1%

Assumed borrowing of £7,500 over 60 months Representative 10.1% APR (?xed) 60 monthly repayments of £158.27 total amount repayable is £9,496.20

4

Perfect Loan Match

Loan Amount

£1,000 to £15,000

Loan Term

1 year to 5 years

Representative APR

10.1%

Assumed borrowing of £7,500 over 60 months Representative 10.1% APR (?xed) 60 monthly repayments of £158.27 total amount repayable is £9,496.20

5

Evolution Money

Loan Amount

£1,000 to £20,000

Loan Term

1 year to 5 years

Representative APR

36.48%

Typical Example: Loan Amount: £5,500.00, Loan Term: 72 Months, Interest Rate: 26.82% PA (variable), Monthly Repayments: £170.86, Total Amount Repayable: £12,301.92.

This example includes an Arrangement fee of £550.00 (10% of the loan amount) and a Servicing fee of £440.00 (8% of the loan amount). Read about our Rates and Fees.

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Essential Facts About Secured Loans

Secured loans, also frequently referred to as second mortgages or second charge loans, are essentially a second mortgage that is listed right below the first, and the property is the security for the second mortgage. A secured loan is a great tool when a person must provide a source for debt consolidation, complete home improvements, or even take a holiday. In simple terms, it means having two separate loans for which the property is the security; however, the first loan is not affected by the second.

Reasons for Seeking a Second Loan

Considering secured loans as an alternative for your clients will soon be a regulatory requirement due to upcoming changes. Whether the loan is desired for the purpose of consolidating debt, to make home improvements or for other reasons, property owners are finding secured loans an increasingly popular and viable option.

Secured Loan Benefits

  • Easy Qualifications

Unsecured loans are typically cheaper for individuals with fair to excellent credit scores; however, as the name implies, secured loans offer lenders collateral, and therefore most loan companies are willing to offer such loans to consumers even if their credit is poor.

  • Large Borrowing Possible

£35,000 is the maximum unsecured loan, but secured loans can be acquired in amounts up to £75,000.

  • Longer Terms

Secured lenders prefer lengthy loan terms, as arrangements of this type offset the initial setup cost of the loan, which can be quite expensive. Therefore, the duration of such loans is usually anywhere between five and 20 years. Unsecured lending, on the other hand, is generally one to seven years, and although longer loans are possible in order to lower the monthly repayments, they also significantly increase the total interest repaid, as outlined below:

Applying for a Secured Loan

A consumer with a current home mortgage can apply for a secured loan provided the person has enough equity in his or her property to cover the borrowed amount.

If the client co-owns his or her property with another person, or if the client has a spouse or is in a civil partnership, a joint application is required.

Advantages and Disadvantages

Secured loans for homeowner loans can be acquired in any amount between £5,000 and £125,000, making them a good choice for those who desire a substantial loan.

Even though total borrowing costs frequently work out higher than just the borrowed amount and the interest, the headline interest rate on the majority of secured loans will fall somewhere between five and six percent.

An additional benefit is that it is easier for your client to repay the loan, as the monthly payments are fixed.

The amount a client personally borrows through a homeowner loan depends on the person’s income, existing credit commitments, overall credit score, and the amount of the property’s equity.

Therefore, although lenders may offer loans of up to £100,000, only a fraction of that may be available to consumers who have low credit scores, too many loans already, or not enough equity in their property.

Similar to personal loans, the interest rate provided by the lender varies from one borrower to the next, based on credit. Additional disadvantages include repossession of property if the borrower defaults on the repayments. For this reason, most consumers are motivated to pay in a timely manner.

Secured Loan Alternatives

A popular example of an alternative to a homeowner loan is an unsecured personal loan of up to £15,000, running for a length of five years. With this option, the consumer can avoid placing his or her dwelling in jeopardy, and the loan may also feature a lower interest rate.

Borrowing more than £15,000 may present difficulties, however, if the loan is not secured. Therefore, the best option for those looking to borrow a large amount of money is re-mortgaging to free up some cash. Mortgage rates for consumers with lots of equity can be as low as two percent.

Nevertheless, the downside includes the possibility of high initial fees and paying interest on the entire amount owed for a longer length of time.

FAQs

  1. Can a client who does not live on the property apply for a secured loan?

Yes, provided the person can prove the existence of a formal tenancy agreement.

  1. How do secured loans work?

In simple terms, the borrower has a loan that is secured against his or her property’s equity. He or she is required to make regular repayments until the initial amount borrowed, as well as the accrued interest, is paid off.

  1. For Whom is a Secured Loan the Best Option?

Secured loans are not associated with upfront fees, and are usually more flexible for those on benefits only or pension incomes, or who reside in ex-council houses.

  1. Self-employed clients without accounts

Affordability checks have become tougher than ever before, and many banks now require as many as three years of accounts for income proof. However, certain secured lenders on the Clever Lending panel accept an accountant’s reference, tax return or bank statement as proof of income.

  1. The client has a complicated credit profile

Secured loans are quite flexible with regard to eligibility, and therefore they are a good alternative for clients who have had problems in the past acquiring credit. Even those with missed payments or defaults on their credit history may find the solution is a secured loan from Clever Lending.

  1. The client wants to retain his or her current mortgage arrangement

The client may prefer to retain a current low or fixed mortgage that was previously acquired. Opting for a secured loan is one avenue through which to keep the current rate stable, whilst simultaneously raising capital.

  1. The client does not have enough equity for a re-mortgage

The client may discover there are limited LTV lending alternatives available. Therefore, if he or she has little or no equity, the preferred choice may be a secured loan. Clever Lending can assist individuals to identify possible alternatives if this is the case.

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