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Secured loans for bad credit

find a BAD CREDIT HOMEOWNER LOAN to suit your needs

  • Compare loans with our specialist partner Fluent MoneyRepresentative 29.9% APR

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We’ve partnered with Fluent Money to help you find the right secured loan

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Getting a secured loan with bad credit

Getting a secured loan with bad credit

You may find it difficult to be approved for a personal loan if you’ve got bad credit. But you could still get a secured loan. 

This is because some lenders are more open to approving loans if you’re a homeowner or have other valuable assets to put up as security – even if you have a less than perfect credit history.

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Representative 29.9% APR

How much can I borrow on a secured loan with a bad credit score?

The higher your credit score the better rates and terms you're likely to be offered on a secured loan – and you’re more likely to be able to borrow a larger sized loan. How much you can borrow will depend on:

  • Your income and outgoings

    Lenders will look at your full financial picture and the value of your home when deciding what to lend – and what you can afford.

  • Your credit score

    All lenders will conduct a full credit check to ensure the loan is appropriate. The better your credit score the more likely you’ll be able to get a loan and at favourable terms.

  • The lender’s individual criteria

    Different lenders will have their own policies and criteria for advancing loans so it’s good to check the deals on offer from a range of providers.

What do homeowner loans cost with a bad credit score?

Using your home as security on a loan may give you a better chance of being approved if you have bad credit. But the loan is likely to be more expensive than if you had a good credit rating. This is because the lender will see you as higher risk. 

This table shows examples of how much a homeowner loan could cost with a bad credit score compared to a good credit score. As the interest rate rises both the monthly and total cost go up.

Examples of secured loan cost for a £15,000 loan taken out over 15 years.

APR 

Monthly repayment

Total cost

3%

£269

£16,156

10%

£316

£19,174 

15%

£349

£20,968

20%

£384

£23,036

What are the pros and cons of a secured loan with poor credit?

Weigh up the pros and cons of a secured loan with bad credit...

  • Tick

    Advantages:

    • Higher chance of being accepted when using your home as security

    • Lenders may be willing to lend more on a secured loan 

    • Can improve credit rating if you keep up with repayments

  • Cross

    Disadvantages:

    • Risk of losing your home if you can’t keep up with repayments

    • Can be more expensive if you have a history of bad credit

    • Fewer loan options available compared to unsecured loans

How can I improve my credit score?

How can I improve my credit score?

A higher credit score means you’re more likely to be accepted for a greater range of loans and at lower interest rates, so growing your score could give you more deals to choose from. Tips to improve your credit score, include:

  • Using our free credit monitor service to check and correct any mistakes

  • Registering on the electoral roll

  • Paying your bills on time 

  • Reducing how much you borrow each month

For more handy tips, read our guide on how to boost your rating.  

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Compare secured loans for bad credit with MoneySuperMarket

Comparing and applying for a loan is straightforward with MoneySuperMarket. We’ll show you your offers and chance of approval.

  • Tell us about yourself

    We’ll need to know a bit about you. Make sure you register yourself as a homeowner to see secured loans in the results

  • We’ll browse the market

    We’ll show you the loans you’re eligible for – if you choose a secured loan you’ll need to register your interest with our partner Fluent

  • Compare loans

    Fluent Money will contact you to discuss your secured loan options. Then you can weigh up what might be best for your needs

Representative 29.9% APR

When you take out a secured loan, a condition of the loan is that you put up an item of high value as security in case you fail to keep up with repayments. If you are a homeowner, in most instances this will be your house. Other lenders may offer loans against other assets (suchg as your car), but with our partner Fluent Money only your home can be used as collateral.

A secured loan may be easier to get than an unsecured loan if you have bad credit. This is because the provider has the security that they can seize the collateral you put up, for example, your house, if you fail to keep up with repayments. This is why a secured loan agreement should not be entered into lightly as it poses risk.

Yes. Each lender will have their own terms for what loan applications they’ll approve, but while a secured loan might give them more confidence to lend to someone with bad credit, it is not a guarantee.

If you keep up with repayments and prove you can handle credit responsibly, then a secured loan can help you improve your credit score over time. If your goal is simply to improve your credit score though, you may be better off considering a credit-builder credit card.

This will depend on the provider. Some lenders will allow you to pay off the loan early, but many will charge an early repayment charge. Check the terms of a loan before signing up in case your financial situation improves, and you are in a position to pay it off early.  

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