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Secured loans for bad credit

Compare secured loans for bad credit with our partner Fluent Money

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  • See loans from a range of specialist providers
  • Searching won’t harm your credit score

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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 are a homeowner or have other valuable assets to put up as security – even if you have a less than perfect credit history. 

We can help you find the best deals on secured loans with our partner Fluent Money. Even better – searching won’t harm your credit score.

Can I get a secured loan with bad credit?

It is possible to get a secured loan with bad credit, depending on your financial situation and credit score. Generally, because you’re offering your home as security against the debt this poses less risk to the provider - so you might be more likely to get the loan. 

But lenders will still want to be sure you can afford it and they will look at your credit history. The better your credit score the more likely you are to be offered a secured loan with a competitive interest rate. You’ll also need to meet the following criteria:  

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Be a homeowner

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Pass affordability checks, with proof of income and outgoings

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Be 18 or over and a UK resident

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How much can I borrow on a secured loan?

How much you can borrow will depend on your income and outgoings and your credit score. All lenders will have different criteria, although broadly the better your credit score the better rates and terms you’ll be offered – and you’re more likely to be able to borrow a bigger loan. You’re also likely to be able to borrow more than with an unsecured loan because you are putting your home as security for the lender.

Our loan calculator can show you how much a secured loan would cost you at different interest rates or APRs – so you can be confident you can afford your monthly repayments before you apply. Remember to only ever borrow what you can afford to pay back.

What to consider before taking a secured loan with bad credit

Before taking out a secured loan with bad credit make sure you understand the interest rate you’ll be charged and any extra fees (like charges for missed payments). Look at the overall cost of the loan and be confident you can comfortably meet the monthly repayments. With a secured loan your home is at risk if you get into repayment difficulties. 

Here’s some advantages and disadvantages of taking out a secured loan with bad credit:

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    Advantages:

    • Higher chance of being accepted if 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
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    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
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Improve your credit score for better loan deals

 

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.

 

 

You can check your credit score with our free credit monitor service, which also provides handy tips on how to boost your rating.  

From getting on the electoral roll to paying bills on time and reducing how much you borrow each month – credit monitor’s helpful hints can get you on the path to stronger credit and cheaper borrowing.

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

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

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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

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Fluent Money will contact you to discuss your secured loan options

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 (like 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 lay claim to 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.  

 

 

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 responsibly handle credit, 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 may allow you to pay off the loan early, but many will charge an early repayment charge. It’s always best to check the terms for early repayment before signing up to the loan in case your financial situation improves, and you are in a position to pay it off early. Even if there is a charge, you may still be better off clearing the outstanding balance rather than continuing to make monthly repayments.

 

 

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