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We’ll ask you a few questions about what you need the secured loan for and how much you’re looking to borrow and run a quick ‘soft search’ that won’t harm your credit rating.
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for UK homeowners
MoneySuperMarket is a credit broker not a lender. You must be 18 or over and a UK resident. Your home is at risk if you do not keep up with repayments.
We’ve partnered with specialist loan provider Fluent Money to help you find the right secured loan for your needs.
We’ll ask you a few questions about what you need the secured loan for and how much you’re looking to borrow and run a quick ‘soft search’ that won’t harm your credit rating.
We’ve partnered with Fluent Money to bring you tailored loan deals from leading UK lenders, helping you borrow what you need for the lowest rates possible.
You can apply in confidence, understanding your chances of being approved for the amount you need at an interest rate you’re happy with.
Secured loans, also known as homeowner loans, are a type of loan that uses a valuable asset, usually your property, as collateral.
This extra security means there’s less risk for the lender so you may be able to secure a bigger loan and at a lower interest rate, compared to an unsecured loan.
But secured loans come with risk. If you can’t make up your repayments, the lender could take possession of your property.
Secured loans are straightforward to apply for and once approved you’ll usually receive the money direct into your bank account. Here’s how the process works:
There are a range of secured loan options available. MoneySuperMarket helps by asking a few simple questions to help show you loans tailored to your financial situation.
When happy with your loan choice, including the amount you’ll borrow, the interest rate and any fees, you can apply online. Fluent will then contact you to discuss your options and find out more.
Once your application has been approved, the lender will send the requested amount – usually within a few days – to your nominated bank account.
You’ll then start making fixed monthly payments, including interest, for the agreed length of the loan. Once you have made the final payment, the loan is cleared.
There are advantages and disadvantages to taking out a secured loan in the UK. These include:
You can get the money you need relatively fast
A homeowner loan could cost less in interest repayments than an unsecured loan
You might be able to borrow more than you could with an unsecured loan
As with all loans, you’ll pay back more than you borrow
You risk losing your home if you can’t keep up with repayments
The loan might be more expensive if you have a bad credit score
How much your secured loan will cost you will depend on a range of factors, including how much you need to borrow, the interest rate you’re offered (this will be determined by your financial position and credit score) and the term or length of your loan. You may also need to factor in any additional fees and charges on your borrowing.
Our table shows how much a £20,000 secured loan might cost in monthly repayments and the total interest cost at different interest rates and for different loan terms. Our loan calculator can help you work out the cost of your loan.
Loan term (£20,000 loan) | Monthly cost at 2.5% (fixed rate) | Monthly cost at 5.5% (fixed rate) |
|---|---|---|
Three years | £577 (£20,771) | £605 (£21,698) |
Five years | £355 (£21,282) | £381 (£22,847) |
Ten years | £188 (£22,594) | £216 (£25,887) |
Loan rates used are for illustration purposes only. Amounts in brackets show total cost of loan plus interest.
Both secured and unsecured loans offer you a lump sum of money, and then give you a set amount of time to pay it back. But aside from that, they work very differently. Here are some of the important differences:
Tied to collateral
Your loan is tied to your property, so it could be repossessed if you don’t keep up with repayments
Broader borrowing options
With a secured loan, you could borrow larger sums of money and pay it back over up to 25 years
Easier to get
Secured loans pose a lower risk to lenders, so you can get a loan with a lower credit rating
No collateral
If you default, it might be tricky to get credit in the future – but you won’t lose your home as the loan is not secured on your property
More variable terms
It’s rare to get unsecured loans over £25,000 or longer than 7 years – and the interest rate you’re offered will vary more widely depending on your credit rating
Stricter requirements
Lenders will look at your credit score, not your property – so it could be harder to get a loan if you’ve had debt problems in the past
If you’ve struggled with bad credit in the past and your credit score isn’t as high as it could be, it can still be possible to get a secured loan. This is because a secured loan is tied to your property, so creditors are less worried about losing their money if you default.
Taking out a secured loan and making all your repayments could even improve your credit score, making it easier to get credit in the future. But you should keep the risks in mind: if you hit financial difficulties and you can’t pay back what you’ve borrowed, it’s possible you’ll lose your home. Always think carefully about your options before you take out a loan and remember that your circumstances might change in the future.
If you’re looking to improve your credit score, a credit-builder credit card could be a good to start.
Representative 29.9% APR
See personalised deals and find the right homeowner loan for you
We’ll need to know a bit about you. Register yourself as a homeowner to see secured loans in the results.
We’ll show you loans you’re eligible for – if you choose a secured loan you’ll need to register your interest with our partner Fluent.
Fluent will contact you to discuss your secured loan options. Once you’ve decided on a loan you can make your full application
Secured loans can be easier for people with lower credit scores to get. Certain loan providers will be more inclined to lend money to someone with bad credit if they’re putting up a security.
That depends on the provider, but while lenders might be prepared to offer secured loans to a wider range of customers, it is definitely possible to have a credit score that’s so low you won’t be considered for this kind of loan. If you’re at that stage, you should seriously reconsider borrowing any more money.
You get a secured loan in the same way as other loans: by making an application to a loan provider. This will require you to provide some details about yourself and your finances. If you’re approved, you should receive the money in a few days
If you take out a secured loan and manage to meet all of your monthly repayments in full and on time, you might see your credit score improve over the course of several months.
A secured loan isn’t necessarily the best way to improve your credit score however. Consider a credit-builder credit card if that’s your goal.
You may be able to pay off a secured loan early, but this will depend on your loan provider. Some lenders may charge an .
An unsecured loan is certainly a less risky proposition than a secured loan as there’s no collateral on a standard personal loan. However, if you need a substantial sum of money and you’re certain you will be able to make your repayments, a secured loan might be more suitable.
Of course, you should consider the APR you are offered by your lenders as well: a secured loan with a lower APR might be a better bet than an unsecured loan with a high APR.
It might be possible to get a secured loan against the value of your vehicle with some providers – but currently, MoneySuperMarket only compares secured loans for homeowners. This means your collateral has to be a house or a flat.
There are plenty of providers that will allow you to borrow money against your pension fund – this is known as a pension loan. At the moment, MoneySuperMarket doesn’t compare pension loans, but you can find out more about your options by talking to a financial advisor.
You might be eligible for a homeowner loan if you are aged 18, a UK resident and own property. The final decision will come down to the loan provider, who will also undertake financial checks for affordability and your credit rating.
If you’re looking to borrow but don’t want to take on a homeowner loan, then there might be a few alternatives. These include:
Unsecured loan. A personal loan where you don’t have to put up security to be approved. Although you won’t lose your home if you can’t repay it, you might not be able to borrow as much and the APR might be higher
Credit card. If you can pay back the money you need quite quickly, applying for and using a credit card could be an option. Look for 0% or low interest deals, so you don’t get caught paying high interest
Remortgage. If you have a mortgage on your existing property and have built up equity, rather than take out a second secured loan or ‘charge’ against it, you could consider remortgaging. This means increasing and sometimes extending your existing mortgage term to release the funds you need.
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