We are currently experiencing technical difficulties with our telephone system.
We apologise for any inconvenience and are working to resolve this as soon as possible.

There are a number of considerations that should be taken into account

Loan Application Checklist

Secured Loans > Help & Advice > Loan Application Checklist

Homeowners often have thousands of pounds worth of equity locked up in their property. One way to access this is to take out a secured loan. This can be an attractive option for those who are looking to borrow larger sums of money. However, there are a number of considerations that should be taken into account before choosing to borrow money against the value of your home or other assets.

Taking out a secured loan requires you to put forward an asset, such as your home, as a guarantee of full and timely repayment.

The major risk of homeowner loans is to your property. By using your property as security in this way, you are agreeing to the lender having a legal claim on your home in the event that you become unable to make repayments for some reason. However, there are potential benefits too.

Cheaper Borrowing

Lenders will often offer lower rates of interest for a secured loan compared to an unsecured one. This is because they have additional reassurance that the loan will be repaid, so there is a lower risk for them.

It is important to compare the cost of a secured loan to ensure you are getting a competitive rate. The loan period can also make a difference to the overall amount paid back. It is a good idea to use a secured loans calculator to work out the full cost of the loan before making any commitments.

Poor Credit

Those with a poor credit rating may find it difficult to be approved for an unsecured loan. However, in some circumstances they may be able to successfully apply for a secured loan, although interest rates are usually higher. The decision to take out a secured loan requires careful thought, especially for those who have previously found financial management challenging.

Other Considerations

Other than cost, those considering taking out a secured loan should also think about some other questions.

Are you able to make repayments, both now and in the long term? With any type of loan, the borrower must be confident that they will be able to maintain repayments. This is especially important for those with a secured loan, as inability to repay could put their home at risk.

Income Protection Insurance

Anyone borrowing additional amounts against the value of their home must think carefully about insuring their income. This is because monthly repayments will increase and it may be more difficult to afford them should circumstances change. Income protection insurance can offer some security.

What Are the Alternatives to a Secured Loan?

An unsecured loan can be suitable for those looking to not secure the loan against their property. However, interest rates may be higher.

Credit cards offer a flexible solution to borrowing and can be a low-interest option. However, credit limits are typically considerably lower than for either an unsecured or a secured loan.

If you do make the decision to get a secured loan, it is important to find the most competitive deal possible by comparing available loans. Consider interest rates and the borrowing period, and always calculate the total amount you will pay back using a secured loans calculator.

Warning: Late payment can cause you serious money problems. For help, go to moneyhelper.org.uk
Representative 28.96% APRC (Variable) - For a typical loan of £20,950 over 85 months with a variable interest rate of 23.00% per annum, your monthly repayments would be £537.44. Including a Product Fee of £2,095.00 (10% of the loan amount) and a Lending Fee of £714.00, the total amount repayable is £45,682.15. Annual Interest Rates ranging from 11.7% to 46.5% (variable). Maximum 50.00% APRC. The loan must be paid back by your 70th birthday. Read more.

Think carefully before securing debts against your home your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
© 2024 Evolution Money | Cookies | Terms & Conditions | Fair Processing Notice
Start Here
Please wait

Please wait

Don't leave just yet!

Evolution Money are a multi Award Winning UK finance company with thousands of happy customers!

Award Winning

Our friendly loan advisors can let you know if you're eligible for a loan without affecting your credit score. Why not give us a call today!

Freephone 0800 144 8188

Back to Evolution