Secured Loans FAQ

Do Secured Loans Affect My Credit Rating?

Secured Loans > Our Loans > Homeowner Loans > Do secured loans affect my credit rating?

Do secured loans affect my credit rating?

Secured loans can have both a positive and negative impact on a credit rating – like all loans. If you already have a poor credit rating, a secured bad credit loan could be the most suitable option for large amounts.

Like an unsecured personal loan, a secured loan will be reported to the credit reference agencies by your lender.

As long as you meet your repayments on time and in full, as agreed, your rating could improve.

  • Your credit rating may improve if, as with all loans, your make your repayments on time and in full
  • With a secured loan, as long as you meet your repayments, you’ll keep your asset which acts as security on the loan
  • Secured loans are often used for large-scale amounts
  • An asset for secured lending could be any item of sufficient value, such as property, a car, jewellery, artwork or business stock

Due to there being less risk involved for the lender, interest rates may be lower on secured loans than unsecured loans.

This could make repayments more affordable. Therefore, you could potentially improve your credit rating over time.

Defaulting on your loan payments will impact your credit score. You may also be charged late payment fees and, potentially, could lose the asset.

Warning: Late payment can cause you serious money problems. For help, go to moneyhelper.org.uk

Representative 22.93% APRC variable.

For a typical loan of £26,600 over 180 months with a variable interest rate of 19.56% per annum, your monthly repayments would be £484.00. This includes a Product Fee of £2,660.00 (10% of the loan amount) and a Lending Fee* of £763.00, bringing the total repayable amount to £87,030.00. Annual Interest Rates range between 11.7% to 46.5% (variable). Maximum 50.00% APRC. *Lending Fee varies by country: England & Wales £763, Scotland £1,051, Northern Ireland: £1,736.


Think carefully before securing debts against 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.

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