Which Secured Loan Providers Are the Best Right Now?

What Is a Secured Loan?

A secured loan is a way of borrowing money. In this type of loan, you give something valuable, like your home, as collateral to the lender. If you do not make your monthly repayments on time, the lender has the legal right to take your property. The lender can sell it to get back the money you owe.

In the UK, the most common type of loan that people secure this way is a homeowner loan. It is sometimes known as a second charge mortgage. With this kind of loan, you can borrow money based on the value of your home. To be clear, the amount you can get depends on how much equity you have in your home. A homeowner will have more options if they have built up more equity over time.

Why Do People Choose Secured Loans?

People use secured loans when they want to get a larger loan. This type of loan is good for times when you need more money than other loan options give you.

• Home improvements such as putting in an extension or adding a new kitchen
• Debt consolidation
• Paying off bad credit loans or clearing credit card balances
• Starting up a business
• Paying for education or taking care of medical costs

You can usually get the maximum amount of £250,000 or even more. How much you can borrow depends on your credit score, the LTV, and the value of the property.

What Are the Advantages of Secured Loans?

1. Can You Get Lower Interest Rates?

Yes. The lender uses the asset as security. This helps lower the interest rate compared to an unsecured loan or a personal loan. Because of this, monthly payments are less. This is even more helpful if the loan term is long.

2. Can You Borrow a Larger Amount?

Yes. The amount you can get from lenders depends on your credit history and the value of your home. You may be able to get anywhere from £25,000 to £500,000. If you have more value in your home after taking out what you owe on your mortgage, you can get more money.

3. Are Repayment Terms More Flexible?

You can often spread your loan repayments over five to thirty years. This lets you decide your monthly repayment amount. Having this choice can make it easier to make a plan for your budget than a short-term loan that is not secured.

4. Can It Help Your Credit Score?

If you follow your repayment plan, it will help your credit score get better. Over time, this will help you build a good credit history. This is good for people who have a low credit score and want to get back the trust of lenders. A strong credit history comes from making your repayment on time.

What Are the Disadvantages of Secured Loans?

1. Is My Home at Risk?

Yes. If you do not pay back a secured loan, the lender could take possession of your home. This is a real risk. Secured loans often cost less because of it, but you could lose your property if you default. If the lender takes your home, the proceeds of the sale might go to them.

2. Are There Extra Fees?

Yes. Many loan providers will ask you to pay additional costs. These can be things like fees for valuations, brokers, or setting up the loan. You should always check the full list of charges before you agree to any loan.

3. Will It Affect My Credit Score?

When you apply for a loan, the lender will check your credit report. If you miss payments, it will hurt your credit report. But if you keep up with payments over time, your score can go up. Still, your score might go down a bit for a short time.

4. Are There Early Repayment Fees?

Some lenders may ask you to pay fees if you pay off your loan early. These fees can take away some of the good that comes from finishing your loan sooner. So, make sure you read the loan agreement carefully.

What’s the Difference Between Secured and Unsecured Loans?

Can I Get a Secured Loan with Bad Credit?

Yes, there are many UK loan providers that offer bad credit secured loan options. Even if you have a low credit score, you may be able to get a loan with them.

• You are a homeowner who has much equity in the house.
• You get a regular income.
• Your debt is not too high when you look at what you earn.

However, your interest rate can be higher, and your loan term may feel more strict.

What Is a Secured Loan Against Property?

This means the loan is backed by your house or flat. The lender will look at the value of the property and check how much you still owe on your mortgage. The gap between what you owe and what your home is worth is called your home equity. The lender will use this to figure out the maximum amount you can get.

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How Do I Apply for a Secured Loan?

1. Understand Your Needs

Ask yourself:

• How much money do I want to borrow?
• Can I handle the monthly repayments if variable interest rates go up?
• Do I have a good credit score, or could my credit history stop me from getting the loan?

2. Shop Around

Use tools such as a secured loan calculator or a secured loan comparison platform, like Free Price Compare, to:

• Compare interest rates to see which one is better.
• Look at loan terms to know how long it will take to pay back.
• Check if there are any additional costs like broker fees.

3. Choose a Lender That Fits Your Profile

Make sure your chosen loan provider offers:

• This lender tells you up front what the LTV requirements are.
• You get several repayment options to pick what works best for you.
• There are no hidden fees in this offer.
• The company has a strong reputation. You can read their reviews and see their FCA registration.

Who Are the Best Secured Loan Providers Right Now?

1. Norton Finance

• Loan size: You can get a loan from £3,000 to £250,000.
• Loan term: You can pay the loan back over 1 to 25 years.
• Product range: There are more than 600 options to pick from, and this includes bad credit loans.
• Broker fee: The broker fee is 12.5% and it is added to the loan.

Norton Finance can be a good choice if you need some flexibility. This is true, especially if you have a poor credit score or your income is not simple. They have a wide range of products. This means you may get help even if other lenders say no to you.

2. United Trust Bank

• Focus: This is a specialist in second charge mortgages.
• Interest options: You can get both fixed and variable interest rates.
• LTV: The limits are good and depend on how much equity you have.

This lender is a good choice for homeowners who want to borrow money using part of the value of your home, not the full value. You can get a loan based on how much equity you have in it.

3. Paragon Bank

• Loan size: You can get a loan from £20,000 up to £500,000.
• Loan term: You can choose a loan term from 5 years up to 30 years.
• Fixed rate options: You can get a fixed rate for 2, 3, 4, or 5 years.

Paragon Bank gives big home loans to people who have a good credit history. The bank has rates that can compete with others and has simple rules for who can apply. These loans are best if you have a higher income and a lot of value in your home. A good credit history helps you get these loans.

How Can I Responsibly Manage a Secured Loan?

1. Create a Budget

Include your monthly repayments in your plan. It is important to make these payments first so you can protect the collateral, like your home.

2. Use Payment Reminders

If you do not use direct debit, you need to set reminders. Making late payments will hurt your credit history. This can also lead to default charges.

3. Meet a Financial Advisor

If you are not sure about choosing a type of loan, talk to a debt adviser. They will look at your credit report. They also help you understand how you can handle your repayment. A debt adviser checks your money situation, too.

4. Consider Making Overpayments

If your loan lets you pay more, you can make the loan term shorter and pay less interest. This can help you save money over time. First, check if there are any charges for repaying early.

Correct as of 05 June 2025

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