Is a secured loan a good option?

A secured loan may be a good option as you could secure finance with a lower interest rate than an unsecured personal loan. If you have a bad credit rating and need to finance a larger purchase, a secured loan may be suitable.

Secured loans are often associated with mortgages or cars. As such, customers may only consider secured loans for larger amounts, which may result in larger repayments.

However, this isn’t always the case and if you budget appropriately you could make your repayments more manageable. Repaying on time may see your credit score improve as a result.

• Secured loans could be suitable for both small and large amounts
• If you have a bad credit history, a secured loan may give you a better option than a personal loan for larger amounts
• As your property acts as security against the loan, there may be less risk for lenders and this could lead to an approval
• Repayment periods on a secured loan can be longer than unsecured lending. This could make your repayments more manageable

Compared to unsecured personal loans, secured lending could allow you to fund larger purchases.

As an asset is acting as security against the loan, the interest rates on secured loans may often be lower than those of an unsecured personal loan.

A secured loan usually has a longer repayment period than an unsecured personal loan and may also have a lower interest rate.