Best secured loans

What is a secured loan?

A secured loan is a type of personal loan that requires you to use an asset as collateral against the cost of the loan. This asset is generally the equity you own in your house, which is why a secured loan can also be called a homeowner loan or second charge mortgage, but may also be a car, boat or another valuable asset.

If you fail to repay your loan, the lender can take ownership of your collateral to cover the loan amount. This means the lender is taking on less risk in lending you the money, and may offer you lower rates and better loan terms compared to an unsecured personal loan.

What are the best secured loans?

The best secured loan for one person may not be the best for another, but there are a number of factors that can determine what the best secured loan is for your situation. You should consider the following when comparing secured loans:

Competitive low rate. You’ll generally receive a lower rate on a secured loan than an unsecured personal loan as it represents less risk to the lender. Lenders are required to provide the APR on every loan product, which is meant to represent the average annual cost of the loan. However, this rate only needs to be offered to 51% of customers, and the actual rate you receive may be higher. When looking for the best secured loan, you should compare the APR, but also make sure the rate you’re offered is competitive.

Loan term. You may be able to get more flexible loan terms on a secured loan, including longer loan periods up to 20 or 30 years. Please note that the longer your loan term, the more you’ll pay in interest, and the higher the overall cost of the loan will be. The best secured loan would have the shortest loan term, while still having affordable repayments.

Repayment options. Some secured loans may give you the option to make additional repayments or even let you pay off the entire loan amount early without penalty. This can help you save on interest, and is worth keeping in mind when trying to find the secured loan that best suits your needs.

Best secured loan for bad credit

If you have bad credit, it’s likely you may have difficulty getting approved for an unsecured personal loan. However, you can still get approved for a secured loan if you have a bad credit rating. Depending on your situation, the best secured loan will be one with affordable repayments to help make sure you don’t damage your credit score further.

By successfully paying off your secured loan, you’ll also be able to improve your credit score and get better terms the next time you need to take out a loan or credit product.

United Trust Bank Ltd Secured Loan

Compare quotes Read review

65%

Max LTV

£125,000

Max loan

3-30 years

Loan terms

7.1%

APRC

• Pros/cons
• Details

• Available to self-employed
• Applicants with low credit scores may be eligible

• No option to take a repayment holiday
• Lender fee of £995

Minimum age	18
Maximum age	85
Credit profile	Bad
Available to self-employed	Yes
Joint applications	Yes
Can be used to consolidate debt	Yes
Lender fee	£995

Best secured loan for debt consolidation

If you’re struggling with multiple debts or just looking to get better terms on your current loan, debt consolidation is worth considering. By taking out a debt consolidation loan, you can pay off the remainder of your existing loans or debts using the new funds, and then continue to make one repayment on the new loan.

As you’ll generally receive a more competitive rate on a secured loan, you may also save money by using a secured loan to consolidate your debt as your interest payments will be lower compared to your existing loans. The best secured loan for debt consolidation would be one that covers all your current debt, with a rate that’s lower than your existing loan or debts.

Selina Selina FlexiLoan

Compare quotes Read review

65%

Max LTV

£1,000,000

Max loan

5-25 years

Loan terms

4.1%

APRC

• Pros/cons
• Details

• Available to self-employed

• No option to take a repayment holiday
• Lender fee of £995

Minimum age	25
Maximum age	75
Credit profile	Good
Available to self-employed	Yes
Joint applications	Yes
Can be used to consolidate debt	Yes
Lender fee	£995

Best secured loan for self-employed

While you’re still able to get an unsecured personal loan if you’re self-employed, some lenders may be unwilling to give you a loan if you can’t provide evidence of a steady, regular income.

You may find you have more options with a secured loan. While you’ll need to use either a personal or business property as security against the loan, you’ll also likely be offered better rates, as well as higher loan amounts and longer loan terms.

Norton Fast Track Secured Loan

Compare quotes Read review

75%

Max LTV

£100,000

Max loan

1-25 years

Loan terms

12%

APRC

• Pros/cons
• Details

• Available to self-employed

• No option to take a repayment holiday
• Lender fee of £200

Minimum age	21
Maximum age	80
Credit profile	Good
Available to self-employed	Yes
Joint applications	Yes
Can be used to consolidate debt	Yes
Lender fee	£200

Who offers the best secured loans?

Many popular banks and credit providers offer secured loans. You can compare a range of secured loans and get a quote here.

Frequently asked questions

• How do I apply for a secured loan?

  You can generally apply for a secured loan online or by phone, but the process may take longer than with an unsecured loan. The lender may want to check the value of the property you’re using as security, and there are additional documents you’ll need to provide.

• How much can I borrow on a secured loan?

  You may be able to borrow from £10,000 up to £2.5 million with a secured loan, but this will depend on the amount of equity you have in your house that can be used as security against the loan.

• What rate can I get on a secured loan?

  This will depend on factors like your credit history, financial situation and loan terms, but secured loans generally offer lower rates than unsecured loans. Compare a range of loans and providers to find the most competitive rate.

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.