Discover the potential of a secured loan
What can I use a secured loan for?
From a new car to planning a wedding, we look at ways you could use a secured loan.
With a secured loan, you could turn your plans into reality. Many people use a secured loan to cover expensive purchases, like costly home improvements or a holiday.
In this guide, we explore what you could do with a secured loan:
What are common ways to use a secured loan?
Just like a personal loan or credit card, the way you spend your secured loan depends on you and your personal circumstances.
Many people opt for a secured loan because they can allow you to borrow more than you could with other lending options. That’s because the loan is secured against your home – so the lender has more confidence you’ll make your repayments. For example, with Evolution Money you could borrow up to £50,000.
The higher loan amount means that many people use secured loans to afford bigger expenses, that other finance options might not cover.
For example, many people use a secured loan for:
Debt consolidation
Debt consolidation is a common reason people use a secured loan.
You can use a debt consolidation loan to pay off your existing debts – and replace them with one, manageable monthly payment. Doing this could help you stay on top of your finances, as you won’t need to juggle multiple payments.
If you have lots of accounts you’d like to settle and close, a secured loan could be a good option. That’s because the large borrowing potential could help you cover costly debts.
Home improvements
Many people consider a secured loan to fund their home improvement projects. Spending money on your home could be a good long-term investment – but it could be expensive.
To increase the value of your home, you could add a conservatory or renovate your kitchen. These kinds of projects can often cost upwards of £10,000. And while some personal loans can stretch to that, a secured loan generally allows you to afford those bigger home renovations.
A new car
Buying a new car can be expensive. To help cover the cost, many people consider a secured loan for their next set of wheels.
Using a secured loan to pay for a car is a popular choice, as it means you’ll own your car outright. The interest rates are also often lower than the finance deals you might find in car dealerships.
With a secured loan, you could borrow over £10,000 – which can be enough to afford a brand-new car.
Business costs
To grow your business, you could consider a secured loan. Due to their large borrowing potential, secured loans are a popular option for business owners. The secured loan could help pay for those business essentials, such as a van or equipment.
A wedding
Are wedding bells on the horizon? The average cost of a wedding now stands at around £30,000. If your savings aren’t enough to cover the entire cost, a secured loan could help you plan your day.
Is there anything you can't buy with a secured loan?
Once you’re approved for a secured loan, you can use the money for almost any purpose. However, there are some ways you could spend your secured loan which could cause issues.
For example, you won’t be able to use a secured loan as a deposit or a down-payment for a new home. While you can use a secured loan to consolidate existing accounts, it’s not encouraged to take out a secured loan to open up new, bigger commitments.
But remember, how you intend to use the money won’t impact whether you’ll be accepted for a secured loan.
Why am I asked what my loan is for?
When it comes to applying for a secured loan, you’ll be asked what you’re intending to spend the money on. This is to give your lender an idea of your requirements so they can find the right loan for you.
At Evolution Money, we only ask what your loan purpose is to help us understand your circumstances a little better.
When you’re accepted for a secured loan, you can use the money for almost any purpose.
Could I use an unsecured loan instead?
For smaller purchases, a personal loan might be a more suitable option. With personal loans, the money isn’t secured against your home. This is less risk for you; however the lender has less security.
This may mean that they’ll look at your credit score more closely to determine whether you’ll repay the loan. So, if your credit score needs improvement, you may find it easier to be accepted for a secured loan instead. At Evolution Money, we look beyond your credit score – we’ll look at your unique circumstances to find a solution that works for you.
Not sure about whether a secured or personal loan is right for you? Take a look at our guide explaining the difference.
What could a secured loan do for you?
While we’ve talked you through the common reasons people apply for a secured loan, only you know what’s right for you. Whether you’ve got a wedding coming up, need a new car, or something totally different, we’re here to help.
At Evolution Money, we look beyond your credit score to focus on you and your individual circumstances. See if you’re eligible today and receive a no-obligation quote.
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.
